How Crazy is the Real Estate Market in Metro Vancouver?

I wondered how the Sales-to-Active Ratios looked like in respect to the average sales prices from a historical perspective. I was able to get data on the ratios from 2005 and on. When the ratio goes beyond 20%, it means buyer demands are strong and will have upward pressure on price.


There was a big run of booming prices from 2003 to 2008 before it dropped in response to the international economic crisis in 2008. The Sales-to-Active Ratio were pretty strong at 39% in 2005 then it dropped to only 4% in 2008 when nobody wanted to buy anything.

Then the ratio increased to 27% in 2009 and the price increased in response to the demand in housing. The ratio peaked in 2011 before it dropped to its lowest at 7% in 2012 and the price dipped in accordance with the active-to-sales ratio.

In January 2015, the ratio jumped from 17% (a balanced market) to 41% in December 2015. The price shot up in accordance to the strong buyer demand in houses.

In 2016, the Ratio increased to 52% at its highest since 2005 (I have no data on the ratios before 2005). This is a simplified graph and the ratio usually zig-zag up and down from month to month. But since February 2015, the ratio had never fallen below 20% and the market remained a very strong sellers market.

So how’s the month to month sales-to-active ratio in 2016?


Jan – 32%
Feb – 46%
Mar – 52%
Apr – 45%
May – 41%

Although I see a decrease in ratio since reaching its peak at 52% in March 2016, the ratio in May remained very strong at 41% which is stronger than all the other month in 2015. Looking from the first graph, I don’t think we’ll see a big price drop unless we see ratio lower than 13% (if the ratio drop below 13% it means a buyer’s market with downward pressure on price). At 41%, the buyer demand is still stronger than the market boom back in 2005.

An interesting infographic here about the history of real estate in Vancouver with expert predictions. Some say it is will keep going up, some say it will not. What do you think?

On Assignment of Contract

Before May 16, 2016, all contracts of purchase and sale are assignable. After May 16, 2016, all residential real estate contracts of purchase and sale are required to include a clause to prevent assignment.

The government passed this legislation in order to prevent people from buying a home and then assigning the contract to someone else in a few months because the price has risen so much that they can sell it right away for a profit.

What does this new legislation mean for you if you are just a regular buyer?

If you are writing an offer in your own name and later would like to add your husband or wife to the title, now you better plan ahead and include your partner’s name in the offer and add an additional notice to the seller about this partial assignment (assigning part of the ownership to another person).

If you have an accepted offer and before the completion date, you have to move because of a job transfer, before May 16, you can assign the contract to another buyer and take a profit in this booming market for your foresight to buy at the right time. But now, you have to renegotiate with the seller to let you assign the contract (the seller has all the negotiating power now so if you are the seller good for you) or just buy the property first, pay your property transfer tax to the government and then sell it (and the buyer can pay the property transfer tax again).

Interestingly, this assignment prevention clause is only for resale residential real estate only.
This new legislation does not apply to developer’s contracts if you are buying presales or commercial real estate.