The Two Minute Market Update is intended to keep readers apprised of what’s going on in local real estate markets and in the global financial markets that affect real estate via inflation, interest rates, capital flows and public policy. It is best suited for those not able to keep up with all the news every day, but still wanting to be informed.
Two Minute Market Update, June 18th, 2024
REBGV released their May statistics package showing a slowing in price growth and an increase in active listings across the region. This trend appears to be continuing through the early part of June for North Vancouver single family homes as new listings have come on the market at a higher pace than we’ve seen in a while. Lack of listings has been one factor in keeping prices elevated, so it will be interesting to see if these listings find buyers and under what conditions.
Mortgage rate declines have continued, after the Bank of Canada (BoC) reduced rates for the first time since starting their hiking campaign in 2022. Economic data is continuing to show a cooling of inflation and comments from BoC directors have succeeded in jawboning bond yields lower, telegraphing more to come on rate cuts.
US rates have also been on the descent, although not as sharply as in Canada. Expectations of cuts by the Federal Reserve have been scrapped for most of 2024, as most analysts only expect 1 or 2 cuts at most. These expectations will be monitored in these updates, as US rates have a tendency to permit or hinder the BoC from taking its own actions – with the Canadian Dollar being the relief valve for any large discrepancies in policy. Foreigners have recently been net buyers of Canadian bonds, as the expectation of rate cuts (and bond price gains) proves attractive. These flows are fickle and can reverse at any time, or they could continue to put a floor under the Canadian Dollar around $.72.
US equity indexes continue to outperform Canadian and others on the back of increasing concentration in the largest companies, notably Nvidia and anything else that can be used as a proxy for AI investment. Note that increasing concentration in names driving markets to new highs has traditionally been a condition associated with late-stage bull markets.
Bitcoin continues its consolidation near all-time highs, while some of the frothier elements of the last crypto boom are starting to reappear. Crypto is shaping up to be a topic of conversation in the US Presidential Election, as candidates are taking sides on regulatory issues. Gold and the metals are similarly consolidating near their highs and oil prices remain rangebound.
Matthew Stiles
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Disclaimer: The information provided in this column is for general informational purposes only and does not constitute financial, investment, or other professional advice. While I strive to provide accurate and up-to-date information, I make no warranties or representations as to its accuracy, completeness, or reliability. Any actions taken based on this information are at your own risk. Always consult with a qualified financial advisor before making any investment decisions.