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Every year, Mac Marketing releases a MAC Intel infographic that shows the economic factors affecting the Metro Vancouver real estate market.

According to the President of Mac Marketing, “2016 looks like another positive year of affirming Metro Vancouver’s status as one of the world’s most attractive places for real estate investment.”

In the booklet, valuable statistics and forecasts such as the following are covered:

• Presale and resale market analysis
• Vancouver real estate growth charts from 2006-2015
• Graphs showing the hottest neighbourhoods
• Rental rates for each neighbourhood
• Population trends

Read more analysis and print your own copy:
DOWNLOAD the MAC Intel here

The Real Estate Board of Greater Vancouver released a report on Dec. 2, 2015 with the heading: “Housing demand remains strong despite diminishing supply.”

Let’s take Richmond’s single family housing market for example, in the past 7 days, 52 homes were sold but only 43 new homes came onto the market.
In Vancouver, 74 homes were sold while only 60 new listings came onto the market in the past week.
In Burnaby, 30 homes were sold while only 17 new listings came onto the market in the past week.
So demand is stronger than supply in the detached home sector.

REBGV president Darcy McLeod said “The ratio of sales to home’s available for sale reached 44 per cent in November, which is the highest it’s been in our market in nine years.”

November is typically one of the quieter months of the year, but not this year, especially not in the single family house market.

So where is the market going in the coming year?
An article from CBC says “Vancouver real estate prices will keep rising for 2 years, predicts economist”

Another article in the Province pointed out that “Vancouver real estate is a Mainland Chinese buyers’ market, study says”

According to the Goodman Report, Vancouver’s multi-family market is also in overdrive. The reasons are many and include “the highly regarded world-wide allure of Vancouver, continuing high immigration levels, a weak Canadian dollar, a chronic shortage of affordable accommodation, well-documented difficulties in developing new rental stock and ground-hugging interest rates.”

For the month of October 2015, the market remains a strong seller’s market.

In Vancouver West, prices increased by 1.8% for detached homes, increased by 0.98% for townhouses and homes are sold in about 16 to 17 days.

In Vancouver East, median prices increased across all property types. 4.4 out of every 10 single family houses are sold in 10 days and 4.3 out of every 10 townhouses are sold in just 9 days.

In Richmond, prices fell 1.5% to 4% in September but prices started to increase again in October.

We are seeing ripple effects of this hot sellers market in the Fraser Valley now. Our buyers are facing multiple offers situation in Surrey and North Delta with 7 to 10 competing offers on well priced homes.

A 44-year old house in original condition in North Delta asking $729,000 was sold for $768,000 without subjects in 5 days.

REBGV president said in the most recent report that “Residential home sales have been trending at 25-30% above the ten-year sales average for most of the year.”

Last month’s sales were 32.9% above the10-year average and the sales-to-active listings ratio was 31% (which means almost 1 in every 3 homes are selling).

Analysts said there’s upward pressure in price when the ratio reaches 20% or higher (when 1 in every 5 homes are selling), especially in areas where the ratio stays high for a sustained period of time.

The sales-to-active listings ratio has stayed above 20% since February of this year.
On the contrary, there’s downward price pressure when the ratio declines below 12%).

For the full report and stats package click here.

In Vancouver Westside, prices remained flat across different property types but the days on market fell by 1 to 2 days. The Sales-Active-Ratio increased in attached market.

It is still multiple offers situation in Vancouver West’s condo and townhome market and homes are selling for above asking price.

For example in Kitslano area, a condo asking $550,000 was sold for $600,000 and a townhome asking $998,000 was sold for $1,100,000 without subjects.

In Vancouver East, Single family home price increased from $1,120,000 in August to $1,137,500 in September. Sales-Active-Ratio also increased in attached market as inventory remained low while buyer demands are strong.

How would the heritage designation affect Shaughnessy’s home value?

Builders are already leaving the area and buying lots in the vicinity such as Dunbar and even further out in Vancouver East.

An architect friend told me it is sometimes difficult to find the balance between keeping “heritage value” and keeping up with today’s building science.
For example, the city wants to keep important existing windows which are mostly single pane windows.

But today’s building science uses at least double pane windows that are more energy efficient and environmental friendly. So how do you find the balance?

Click here for more info on the Heritage designation

A note on interest rate: Economists and market watchers agree, the two biggest factors in driving home ownership will be real wage growth and continued low interest rates. The next rate announcement will occur on October 21, 2015.

REBGV released a report today “Competition continues to drive Metro Vancouver’s housing market.”

Buyers are actively looking for homes this summer, contrary to the usual slow down during summer holidays. Between June and August, sales were 25% to 30% above the 10-year average.

The sales-to-active-listings ratio in August was 30.9%. This is the 6th consecutive month that this ratio has been above 30% (indicating a seller’s market) in Metro Vancouver.

To read more click here 

 

In Vancouver West, the median single family home sales price has increased to $2,650,500 in July from $2,632,000 in June 2015. For different property types, the number of days on the market are around 18 to 19 days across the board which means the homes are on the market for about a week before they have accepted offers. In addition, the sold price is around 97% to 98% of asking price.

In Vancouver East, we are seeing an even hotter seller’s market with Sales-to-Active Ratio around 28% to 41%. For single family houses, the median sales price are 100% of asking price and on the market for 10 days before it’s sold. So the houses are one the market Friday, open house during weekend, and accepting offers on Monday (likely multiple offers), then sold after the 7-day subject period.

We had the discussion whether China’s stock market plunge will affect Vancouver’s real estate market. Our conclusion is that when stock market is not performing well, people like to move money into real estate and since the currency exchange rate is advantageous to move money from China to Vancouver, people may consider Vancouver real estate a safe haven.

The Real Estate Board of Greater Vancouver released a statistic package today reporting home sales were 33.5% above the 10-year sales average for the month of July.

The MLS® Home Price Index for all residential properties in Metro Vancouver is currently $700,500, an 11.2% increase compared to July 2014.

The sales-to-active-listings ratio is at 34.6%, continuing to be in a strong seller’s market.

According to Darcy McLeod, the president of REBGV, today’s activity is due to:

• strong consumer confidence
• low interest rates
• reduced supply of homes for sale (there are about 5,000 to 6,000 fewer homes for sale today as compared to other summers over the last five to six years)

Read the New Release here.

The Real Estate Board of Greater Vancouver (REBGV) released a report “Metro Vancouver Home Sales Set Record Pace in June.”
It was the highest selling June on record for REBGV.

• Sales increased 28.4% compared to June 2014
• Sales increased 7.9% compared to May 2015

“There were more detached home sales in the region last month than we’ve seen during the month of June in more than 10 years.” Darcy McLeod, REBGV president said. This is what we realtors are seeing right now. If the home is priced right, it gets sold very quickly. Buyers are smart, they’ve been looking at homes for a while and when they see a sharply priced home, they snatch it up quickly.

REBGV president also pointed out that we are in an up cycle that is similar to the mid-2000s and “Conditions today are being driven by low interest rates, a declining supply of detached homes, a growing population, a provincial economy that’s outperforming the rest of Canada, pent-up demand from previous years and, perhaps most importantly, the fact that we live in a highly desirable region,”

The Sales-to-Active ratio in June was 35.9% for Metro Vancouver, the highest it has been since June 2006. This ratio indicates a seller’s market. Read the New Release here.

The most recent available data from Statistics Canada for median household income was $71,140 in 2012. According to a report from The Conference Board of Canada, the average pay increase for non-unionized employees is projected to be 2.9% in 2015 and it is around the same modest increase seen in the past few years. If we assume household income increases by 3% per year, the median household income is around $77,736 in 2015.

So how much house can a family with gross annual income of $77,736 (or $6,478 per month) afford in Greater Vancouver?

Assuming with no other debts, interest rate of 2.85%, 25 years amortization and 20% down payment, the maximum purchase price this family can afford is $376,281. And if they are considering Vancouver, Burnaby or Richmond, these are the choices right now:

So who are buying the million dollar homes in Vancouver?

According to Sotheby’s International Realty Canada’s new report on luxury homebuyers, these people are:

The report also re-affirmed the heavy influence of international buyers on the Vancouver luxury real estate market. Mainland Chinese are the predominant international buyers in Vancouver and they prefer single family homes and condos. Our real estate is considered affordable as compared to LA, New York, London or Shanghai.

In addition, they pointed out the trend of affluent parents of international students from China, Middle East and Europe buying luxury condo as residences for their children while attending schools in Vancouver.

 

The real estate market is very active now a day with a Sales-to-Active Ratio at 32% in Greater Vancouver, the highest it has ever been since 2007. A lot of buyers are buying, some for investment purposes and some for personal use. I also see more companies selling real estate investment seminars now that the market is hot. One of the most common questions we get as real estate agents are: WHERE SHOULD WE BUY?

My answer is: It depends. Are you buying as an investment or to live in? If it is an investment, do you want cash flow or appreciation? If you are buying a home to live in, it also depends on your lifestyle, where you work, and many other factors.

MAC Marketing Solutions, a marketing company for pre-sale constructions, has compiled an infographic overview of the economic factors and statistics affecting the Metro Vancouver Real Estate Market in 2015.

The graph below shows the area with the most price increase in an eight year span from November 2006 to November 2014. Vancouver Eastside has the most price increase in the eight year span, followed by West Vancouver and Vancouver Westside. So if you want appreciation, maybe this graph provides some hints.

The below graph shows the absorption rate of new concrete condo in 2014. Burnaby South/Metrotown’s new concrete condo has the best absorption rate at 75%. Meaning 75% of all new constructions released in 2014 were sold. It is followed by Vancouver Downtown and Burnaby North.

The below graph shows the condo rental rates per square foot for properties less than 20 years old that are currently rented out by ADVENT Property Management. According to the CMHC Rental Market Report, the condo vacancy rate in Metro Vancouver is only 0.7% in 2014, and it is way below the Average of 2.0% in major cities across Canada.

I combined the two graphs together to see which area give me the most return solely based on the rental amount. There are many other factors to consider such property tax rates, amount of down payments but this gives us a very simplified overview.

You can also compare this graph to the first graph that shows which city has the most appreciation. You can download the complete MAC-Intel-2015 here.