05 Oct Vancouver Housing Market Forecast 2019 2020
Vancouver Housing Market Predictions 2019
Vancouver’s economy perked up in September. In fact, BC now has the lowest unemployment rate in Canada, (2% growth in September, +33,000 jobs) well ahead of Toronto. However, is this a last (get stuff into the US quick) uptick before the US China tariffs take effect on January 1st?
After reaching 3.9% in 2017, growth is forecast to ease to 2.9% this year and average 2.7% in 2019 to 2020, before slipping to 2.3% in 2021 — BC Economic Forecast Report
The announcement of the $40 billion LNG project is a big booster shot for BC with thousands of jobs created? The added investment will give the Vancouver housing market a boost and perhaps encourage more new construction. See the housing market report below.
Demand for homes has dropped and housing prices are not falling. Some have given up on the notion that the housing market in Vancouver will ever affordable. Incoming workers and immigration will fuel more demand for lower tier rentals and property. Will demand begin rising next spring as the USAMC trade starts maturing or will protectionist tariffs on metals and softwood ruin BC’s happy days?
BC Unemployment Rate Plunges to 4.2%
Greater Vancouver has a lot going for it and as demand grows from the overheating US economy, this city has to benefit. The BC economic department cites big growth in natural gas, timber, agriculture, manufacturing, services, and that value gets focused right on the GVA.
August’s economic numbers were phenomenal. Exports grew 16.6% to a staggering $4 billion and this is on top of an 11% gain in July. A good portion of the growth was a sudden increase in metals exports.
The housing market in greater Vancouver declined yet again in August, and the upcoming September sales report won’t be positive either. Last month, housing sales hit a 6 year low and in July hit a 30 year low. Yet even with a growing number of listings, prices are still up 2.2% from 2017.
Housing affordability enthusiasts and homebuyers (hoping for a crash) are left with an empty feeling as homes retain their prices amidst continuous political rhetoric. We don’t want to mention Toronto, however the Toronto housing market looks to be following Vancouver’s path.
Housing supply and NIMBY resistance are the key issues no one is willing to tackle. Do you feel the BC government’s $6 Billion plan announced last year is working to increase investment, lower prices and build affordable housing? Are speculators and tax evaders really causing the problem? Or, is this smoke screen buying the NDP some time?
Uncertain Market Access, Uncertain Jobs
Overall, the Canadian job outlook is not strong, despite the deal, and Trump is being tough on Chinese products entering through Canada. That will affect Vancouver and BC. Read more on the Vancouver economy. The only bright spot is the election of Ed Scheer and PCs and this is why:
US President Trump doesn’t like Trudeau and will not do permanent deals with him. Trump will likely update the USAMC agreement with Andrew Scheer, when he’s elected prime minister next year.
Trudeau is holding is own Trade meetings without inviting the US, but so far no one has accepted. Trudeau is exploring trade with China, which is in the midst of its own housing and economic meltdown. After the recent China spy chip revelation, this is not the time to to approach China. The situation looks hopeless for Trudeau.
Vancouver Housing Update September
According to REBGV, demand for homes fell in September, down a scary 43.5% from last September and down 17.3% from last month. That’s down 36.1% from the September historic average.
The number of home listings rose 10.7% from last month and up 38.2% from last September. This is a huge change and yet Vancouver home prices fell only 3% from last month, and are still up 2.2% from September 2017.
Sales of detached properties last month fell 344 units, a 40.4% drop from last September’s sales of 852 units. Apartment sales dropped to 851 units (down 44% from last Septembers total of 1451 units). Attached property sales volumes decreased 46.9% in September to a paltry 275 units, from 518 sales in September 2017.
Regions that saw the biggest declines in the last 3 months include: West Vancouver, Squamish, Whistler, Port Coquitlam, Burnaby South, and Vancouver east
It might be politically expedient that they called it a buyer’s market for detached single homes in greater Vancouver, however home prices and rental costs are ridiculous. A lack of housing affordability in lower BC is the significant issue for BC residents.
This chart courtesy of Terranet, shows Vancouver (orange line at top) is only seeing a leveling off of prices.
New Construction Starts Vancouver
Overall, new construction starts trended downward across Canada and its up slightly in greater Vancouver — the equivalent of a couple of buildings in a city of almost 2.5 million.
Across the country, there were 219,988 units started in July 2018, compared to 221,738 housing starts in June 2018. In Vancouver, in August, there were 297 permits to build 852 residential units. That’s a slight increase over the 279 permits issued to build 346 units in July 2018.
Growth during the summer: The Star Vancouver quotes CMHC as saying 14,719 new housing units were on sale in the Metro Vancouver market so far in 2018. That’s compared to 14671 this time last year. Rental housing was going strong too. Almost 3,890 units of rental housing were built in 2018, about 35% more than at this date in 2017.
All this inventory comes at a time when buyers are disappearing and more likely will leave the overpriced market facing an economic fallback.
Just as in the Toronto real estate market, the condo market is where the focus is. That’s due to high home prices and the fed’s new stress test mortgage rules.
Areas covered by the Real Estate Board of Greater Vancouver include: Whistler, Sunshine Coast,
Squamish, West Vancouver, North Vancouver, Vancouver, Burnaby, New Westminster, Richmond, Port
Moody, Port Coquitlam, Coquitlam, Pitt Meadows, Maple Ridge, and South Delta. Burnaby, Squamish, and West Vancouver suffered the largest monthly drops in house prices.
As this chart from REBGV shows, home prices are still way up from years past. However, it gives us pause for thought about how much they could potentially fall.
This Cameron Muir discussing the BC real estate market one month ago:
Are you looking for good opportunities for rental income property? Or just wondering when the best time to sell your home in greater Vancouver? Take a look at the best best renovation ideas and plan your selling strategy.
The Vancouver housing market is reflective of a strong BC and Canadian economy and the outlook for spring 2018 is positive too. As the King of unaffordability, Vancouver is suffering from a crushed housing market, big immigration, increased global trade, growing poverty and stagnant wages. The monthly stats send the same message each time.
This same situation exists in the Toronto housing market which is enjoying a stronger fall season as well. In fact, a few are sensing the beginnings of continued housing boom after a weak late winter 2018 season.
The Real Estate Board of Greater Vancouver (REBGV) reported that sales of detached, attached and apartment properties reached 35,993 on the Multiple Listing Service® (MLS®) in 2017, a 9.9% decrease from the 39,943 sales recorded in 2016, and a 15% decrease over the 42,326 residential sales in 2015. — from GVREB 2017 Year Report.
Vancouver remains perhaps the most unaffordable city in North America based on home price vs income. And with new mortgage rules Vancouverites have found themselves not much better off. Ask any post secondary student about housing. However, it’s expected that new investment will pour into student hotel housing projects.
The sales to listing ratio for the all important condomnium market was an astonishing 68%, up 7% since September. Cheap condos are hot, and going for way beyond what they’re actually worth.
Please do use this report on Facebook or your Newsletter
It could be BC voters have learned that despite terribly high prices, the BC economy is more important. And the formerly strong Canadian economic forecast is now in doubt. The sad part is that housing affordability remains a big problem in Greater Vancouver. The solution is big investment in housing not in meddlesome government actions. Politicians might be able to do less than ever now.
It would be difficult to rationalize lower prices given a strong, growing economy and a lack of housing in Vancouver.
It’s All About Condos in Vancouver, Burnaby, Surrey, and Richmond
Demand for places to live and for investment properties is being funneled into the Greater Vancouver condominium market.
As of the first half of this year, HPO had received registrations for 1,788 new Vancouver condos, down from 2,488 units at the same time in 2016 — from a report in the Vancouver Sun.
Homes for sale scarcity combined with eager buyers, means demand is being focused on condos, townhouses and apartments. 3043 property sales were recorded in August 2017 which was 2.3% increase over July’s numbers. And it represented a 22% increase over August 2016 sales.
Condo Sales Driving Vancouver’s Market
While sales of detached homes dropped in August 2017 compared to July sales, and compared to August 2016 sales, Vancouver condos are in hot demand. More than 4200 condos and townhouses were listed for sale in August. The decreased availability and rising prices are putting big pressure on International students studying in Vancouver. UBC has 6000 students on their housing waitlist. Huge investment opportunity in foreign student housing.
Are you an investor? The August 2017 sales report shows townhouse/condo/apartment prices are rising fastest in Pitt Meadows, Squamish, Port Coquitlam, Burnaby East and Whistler. Mapleridge saw a big increase in apartment prices likely because the average price is only $252,000.
Vancouver is host to tens of thousands of foreign students studying here, and they have an impact on condo prices. Currently companies such as CIBT specialize in student housing investment. They purchase properties such as hotels to fill this big demand in a Vancouver housing market that is near to a zero vacancy rate. Check out the student housing investment opportunity yourself. The forecast here is for more demand.
Screen Capture Courtesy of BCREA
Here’s a look at the historical price trends in Vancouver contrasted with Toronto prices. You can see the Toronto real estate forecast here.
Sales History for Vancouver Housing Market
The Real Estate Board of Greater Vancouver (REBGV) reports that residential property sales in Metro Vancouver totalled 2,489 in August 2016, a decline of 26 per cent compared to the 3,362 sales in August 2015; 10.2% fewer than the 2,771 sales in August 2014; and 1% less than the 2,514 sales in August 2013. August 2016 sales also represent a 22.8% decline compared to last month’s sales. – From the latest market report from REBGV on Sept 2, 2016.
The forecast is for fewer sales and perhaps lower prices, yet because of the foreign buyers tax, it might look more precipitous right now than it actually will be.
BC Economic Outlook
BCREA has offered a renewed look at the BC economic outlook. If free trade and NAFTA is cancelled from the Americans, these numbers might be much too rosy. Mortgage rates on the other hand may rise as the Fed raises interest rates to serve its own needs.
Scarcity of Land in Greater Vancouver
BC lower mainland real estate was doing well, in stark contrast with Northern BC which saw its sales volume drop 8% and total sales volume drop by 25% compared to January 2015. It will be much worse in August and September.
The Greater Vancouver area saw its sales volume rise 73% to $2,788,099,000. That was actually overshadowed by the 101% rise in sales volume in the Fraser Valley year over year in January. The valley had a growth of $427 Million. Chilliwack and Powell River saw significant gains too, as affordability issues are forcing more BC residents out into the burbs. The condo market in Vancouver showed a shocking increase of 50% year over year.
Moratorium on BC’s Governments
What it means for BC is a rare moment of sunshine where it is leading Canada in prosperity. Add that to BC’s more progressive and optimistic culture, and you’ve got an exciting mix. We can only hope it will last for a few more years before the Conservative wet blanket kills the party.
Vancouver Island enjoyed 50% growth in sales volume and the city of Victoria grew in sales to $260 Million in January. The south Okanagan region had a surprising growth of 44% in sales volume as well. It’s hard to argue that the Okanagan has not benefited from real estate and migration. Now it’s fall of 2018 and we wonder how you feel about BC government leaders actions and whether they were wise? This winter, we’ll know.
Yet, this market isn’t the hottest on record for BC, which was even more heated in 2005, before the crash of 2007. Should this non-record high real estate market be snuffed out?
While politicians were jumping to suppress sales in BC, no one can argue that the deluge of real estate investment money created unheard of opportunity in Vancouver. The province is drawing migrants from Alberta and Saskatchewan who are looking for jobs at a time when Alberta is facing its biggest crisis ever. The worst hasn’t even hit Alberta yet, as oil sunk to touch $25 a barrel last week.
Predicting 2019/2020: 2019 Housing Market | Cities Most Likely to Crash | Housing Crash | Housing Crash China | Chicago Housing Market | Philadelphia Housing Market | Miami Housing Market | Florida Housing Market 2019 | Calgary Housing Forecast | Vancouver Condo Prices | Rental Housing Market Outlook | Los Angeles Housing Market | Student Housing Vancouver | Toronto Housing Market | San Diego Housing Market 2018 | Real Estate Agents in Vancouver | San Francisco Housing Market | Stock Market Crash Predictions | Vancouver Condos | Toronto Condos | Best House Renovations
Are you a Vancouver real estate agent selling condos in Vancouver or detached homes struggling with online exposure? You’ve come to the right place. Have a good look at the best realtor digital marketing program available anywhere.
* BCREA is the professional association for over 19,000 REALTORS® in British Columbia Canada. BCREA focuses on provincial issues that impact real estate. Working with the province’s 11 real estate boards, BCREA provides continuing professional education, advocacy, economic research and standard forms to help REALTORS® provide value for their clients.