Metro Vancouver Real Estate Market Stabilizes 

After a slow start at the first half of 2019, the real estate market in Greater Vancouver seemed to be picking up in the summer. In October, home sales were 9.8% above the 10-year October sales average.

In November, home sales dropped to 4% below the 10-year November sales average as the holiday season is approaching.

If we look at supply and demand, the sales-to-active-ratio for all property types had increased enough in October to push the single family house market in Metro Vancouver from a buyer’s market at the beginning of the year to a balanced market since October 2019. For both townhomes and condominiums, the market had returned to seller’s market from a balanced market although the prices were not as high as last year.

The implementation of the speculation tax, the more stringent mortgage stress test, restriction on farmland build-able square footage and continued tightening of money coming out of China were the many government and international factors that held off buyers at the sidelines at the beginning of this year. As a result, we see home prices drop about 10% across the board. The big banks started to market promotional interest rates to attract buyers.

Since summer 2019, we see buyers coming back into the real estate market.

“Home buyers have more confidence today than we saw in the first half of the year,” says Ashley Smith, REBGV president. “With prices edging down over the last year and interest rates remaining low, hopeful home buyers are becoming more active this fall.”

Another interesting trend we see is that the home price index for condominium is in line with single family houses in 2019 (see graph below). The condo market has been so hot for so long while the detached home market has been slow for several years. As a result, the price of condo is catching up to the price of single family home. It might be a great opportunity for condo owners to upgrade to single family houses. Or simply a great time to buy detached homes. For example, someone with a condo in Vancouver may be able to sell it and buy a single family home in the suburbs like Richmond or Burnaby.

Click on the links below to see some predictions for the coming year in real estate:

B.C. housing market to stabilize in 2020, accelerate in 2021: federal report

Home sales across B.C. to rise 10.9% in 2020: forecast

May 2019 Real Estate Market Update

According to the Real Estate Board of Greater Vancouver’s stats report, housing supply had reached 5-year high in May 2019.

REBGV president Ashley Smith said: “High home prices and mortgage qualification issues caused by the federal government’s B20 stress test remain significant factors behind the reduced demand that the market is experiencing today.”

Home sale had increased 44.2% in May as compared to the previous month (April 2019) but compared with May last year, home sales had decreased 6.9% (total 2833 sales recorded in May 2018)

May 2019: Total 2638 home sales
April 2019: 
Total 1829 home sales
March 2019Total 1727 home sales
February 2019Total 1484 home sales
January 2019: Total 1103 home sales

As expected home sales had picked up in Spring but it had not reach the frantic heights as in past years (see graph below):

The Sales-to-Active Listings Ratio that reflects both home sales and inventory in May 2019 were as below:

The Sales-to-Active Listings Ratio for both townhomes and condominiums had reached 20% last month (May 2019). If the ratio surpasses 20% over several months, home prices generally go up according to analysts. It is a great time for buyers of all property types as there are more inventory to choose from and the our real estate market seemed to be very healthy (with no signs of a crash).

If we look at the Sales-to-Active Listings Ratio in different areas, for condominiums, we see a different types of market:

North Delta:           30.0%  seller’s market
Vancouver East:    28.2%  seller’s market
Coquitlam:             24.9%  seller’s market
Surrey:                   23.6%  seller’s market
Metro Vancouver:   21.2%  seller’s market
Burnaby:                19.7%  balanced market
Vancouver West:   18.9%  balanced market
Richmond:             14.9%  balanced market

The Bank of Canada held its overnight rate at 1.75% which kept the bank interest rates at 3.95%. Unlike the central bank’s previous statements, there had been no mention of further increases as the economy had nearly ground to a halt at the beginning of this year.

Bank of Canada holds key interest rate at 1.75% (May 29, 2019)

To read the May 2019 stats report from the Real Estate Board, click here.