Vancouver Housing Market Update and Forecast
Real estate sectors experts and authorities are talking a lot about a lack of housing supply, but for Vancouver, this is nothing new. The greater Vancouver region has been regulated out of housing supply for many, many years now.
See the latest Vancouver housing prices and stats below. First time buyers are seeing the continued rise in prices, and with much less listings, their hope of homeownership in the Greater Vancouver area will be frustrated just as it is Toronto and Montreal. Only in Calgary do homebuyers enjoy a good situation.
The Vancouver MLS system currently tallies only 9005 homes listed for sale which is down a whopping 29.7% versus August 2020 (12,803 homes for sale) and it was a sharp 8.6% from last month. Sharp drops like that add volatility and uncertainty, which invites speculation and bidding wars.
Housing supply is the issues, because demand will never cease. Vancouver is the California of Canada with the same backwards, messed up politics at local, provincial and federal levels. All conspire to create great pain for locals in the name of ideology. The rise in homelessness, crime and drug use has also coincided with the NIMBYism.
Those NIMBY regulations combined with a lack of available land for development cannot work with the reality of this part of Canada. BC is the world’s most attractive place and people are moving to the region in droves. More focus on government leaders who oppose development and won’t support it has to be uncovered. Another option is for BC to promote the Okanagan region to ease some of the demand.
The solution is more high density housing and housing that can serve communities well. Condo developers are trying to keep up with demand against lagging support from Politicians who are all in on blocking Alberta oil. Housing supply in Vancouver is the issue, and politicians missing in action. It looks like a big win is brewing for Erin Otoole and the PC party in the Federal election, but will that translate into more housing?
August 2021 Housing Stats
REBGV reports in it August stats another round of stats reflecting the pain of no supply for Vancouver home buyers. For sellers, it’s a bonanza beyond compare, and most are sitting on their properties until the price reaches its apex. The home taxes only raise speculative prices for all buyers and a reduction of tax could provide some relief.
August home sales were brisk. Residential home sales across Vancouver rose 3.4% to 3,152 sales year over year yet they did cool off from the 3,326 homes sold last month. August’s housing sales were 20.4% higher than the 10-year August sales average.
This was a hot year for housing in Vancouver of course and stats will remain cooler until spring of 2022 which could be another record price period.
4,032 new detached, attached and apartment properties showed up on (MLS®) in Metro Vancouver in August 2021. That is sharply down 30.6% from August 2020, when 5,813 homes listed in August 2020 and it’s also down 7.9% compared to July 2021 when 4,377 homes were listed for sale.
The lack of properties for sale means the MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver rose just .1% from last month, but is up 13.2% from last August, to a new price of $ 1,176,600. And the price of a detached home is $1,807,100, which is up a startling 20.4% from 12 months ago.
The benchmark price of an attached home reached $952,600, which is up 16.5% from August 2020 and up 0.3% from the previous month.
Apartment sales rose 22.4% to reach 1,631 units in August 2021 compared to 1,332 sales in August of last year. The new benchmark price of an apartment rose 7.6% year over year to an astonishing $735,100. Apartment prices have fallen only 0.2% compared to July 2021.
Vancouver region residents have to ask whether the NDP government has brought improvement and whether the outlook for 2022 is better?
BC and Federal Governments have announced little in the way of additional support for construction and housing development. They’ll respond weakly with phoney speculation taxes to try to kill demand, but it won’t work. Speculation money is being used to build new housing including affordable rental housing too.
The forecast for the Vancouver real estate market just as with the Toronto real estate market is higher prices and that includes rising prices for apartments and condos.
Vancouver’s housing market is as pressured as the Toronto housing market, Kelowna housing market, and Calgary housing market and we’ll see higher prices for the next year. With some political support for housing due to the election, we can predict that a housing market crash isn’t likely, until 2023 when mortgage rates rise.
An Angus Reid Institute survey showed that 28% of Vancouver buyers felt miserable about the housing market but this is below how buyers in Calgary, Edmonton and Halifax felt. It could be Vancouver buyers operate in their own world of expectations since clearly, prices, affordability and availability are much worse.
REBGV MLS market covers the communities of Vancouver, West Vancouver, Richmond, Surrey, Coquitlam, Maple Ridge, New Westminster, North Vancouver, Pitt Meadows, Port Coquitlam, Port Moody, South Delta, Squamish, the Sunshine Coast, and Whistler.
The cities of Surrey, Abbotsford, Langley and North Delta are in the Fraser Valley Real Estate Board. In that region, Single Family Detached home prices rose 6.4% to a median of $1,237,900 compared to February 2021, that is up 25.3% compared to March 2020. Townhomes in the Fraser Valley reached a median of $624,500 which 4.0% more than the previous month and up 13.7% compared to March 2020. All told, this would make these small cities a desirable place for Vancouver region buyers to move to.
About half of Canadian hope for price rises while others home for house prices to fall.
Home sellers in Vancouver are certain they will get their price, another signal of higher prices in the year ahead.
As long as the BC economy and Canadian economy hold up, there is litte to make us believe demand will ease. Many millennials for instance are getting married and feeling the pressure of having kids and creating a home. If the Fed decides to raise interest rates, it could lead to destabilization and a crash.
Trudeau’s government is likely to take a wait and see approach as the US is doing and to hold off on interest rate raises.
A Look Back at March of this year:
Vancouver’s jump and in sales and price is a welcome event for sellers who may be considering a move to less densely populated regions of the province or even out of province.
Vancouver Real Estate Agents
Vancouver is an unusual real estate market which only the local Realtors fully understand. Homeowners here may see fewer options for moving or relocating and could hold onto their homes indefinitely. Only higher taxes, cost of living and lower quality of life might encourage them to put their home or apartment up for sale.
Those bad old memories of so few houses for sale and the wicked price rises when buyers have the resource to big come back to mind. BC’s Covid 19 cases have been rising, but don’t look serious enough to warrant a shutdown. Still, buyers will be shy about committing to buying a house or condo if they’re on the borderline for affordability.
And in eastern BC in the Okanagan, home prices in Kelowna Vernon and Penticton were on the rise, despite falling inventory and sales.
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Vancouver Home Price Predictions 2021
Adding to good outlooks for the Vancouver housing market is the post-pandemic euphoria. It will be strong, and immigration will return as will foreign students returning to study in lower BC. Students will help fill up those condo vacancies in Richmond, Surrey, Burnaby, Kitsilano, Point Grey and other neighborhoods.
The resumption of International trade and with foreign students and investors returning will give Vancouver’s economy a big boost. We should remember how good things were back in 2015 before the US presidential change. Some Realtors are comparing 2021 to 2015.
Capital Economics’ Stephen Brown offers his home price forecast of a 3% rise in 2021 and 5% in 2022 which will be a an 8% from current prices. So far prices are rising fast which supports Brown’s housing forecast.
BCREA is its housing forecast is all onboard with a prediction of rising sales in 2021. Brendon Ogmundson, BCREA’s Chief Economist said in a recent release BC residential sales are forecast to grow 9.7% to 99,240 units in 2021.
However, he does believe pent-up demand from the pandemic will ease thus easing price pressure.
Central1’s Economic Outlook
Did we see slower growth in 2021, as this prediction suggested?
Pessimists Point to Fiscal Problems that Suggest a Housing Crash
CMHC did boldly forecast a dour outlook for the next two years however they eventually retracted their prediction. That view had little support and sales stats in Vancouver, Okanagan, Toronto, Montreal, Calgary, Mississauga, York Region and the rest of the GTA continue to show big demand and rising prices.
Housing markets are so severely short of supply, it would take something very dramatic, like the pandemic to suppress sales. The pandemic in fact, is helping to accelerate sales that never would have happened (outflow from cities to suburbs and small towns).
Vancouver’s economy will certainly be challenged however with the positive outlook for vaccinations, we could see huge demand this summer as vaccinations grow.
The Canadian government just announced a $100 billion stimulus package beginning in 2021, which will give the BC an extra boost going forward. Natural gas, metals, and forestry products should all increase in price which further supports a good outlook for the Province of British Columbia.
Vancouver is still a key port for Canadian exports, and as imports grow the Vancouver terminal should be busy in 2022.
Home Sales Across BC
BCREA’s latest market report from May shows that a total of 4,518 residential home sales were recorded by the Multiple Listing Service® (MLS®) in May 2020. That is down 45.2% from May of last year. Not too much of a surprise. The average MLS® residential price in BC in May was $728,898, 3.2% higher than the $706,394 recorded in May 2019. Total sales dollar volume in May was down 43.5% to $3.3 billion, compared to 2019.
New Home Construction
BC Economic Outlook
The pandemic, oil price shock, and more uncertainty about who will win the US Presidential election makes previous economic outlooks not very credible. However, for what it’s worth here is BC’s economic outlook for the next 2 years.
It’s disgraceful what’s happening in BC, that new housing isn’t being built. NIMBY’s are making life really difficult and the government’s anti-development policies will ensure ultra high real estate prices. If demand hits as the experts say it will, Vancouver could be in for another period of deep suffering in high rent to income, and more homelessness issues.
Buying in Vancouver? Keep your eye on the big picture and key economic events and see which neighborhoods are going to drop in price the most. West Vancouver, North Vancouver, Burnaby, Port Moody, North and Port Coquitlam, appear to be the most vulnerable.
Certainty is Returning to Markets
With the exit of President Trump, the clock is turned back to 2015. This time, China is in the driver’s seat as they haven’t been ravaged by Covid 19, the disease they launched. They’re off to a roaring start, but goods being imported into Canada and then sent to the US should help support Vancouver’s real estate market.
A return of tourists will have a dramatically positive economy impact. From downtown Vancouver and Stanley Park to the Airport, up to Squamish and Whistler, the resumption of visitors in will be great.
Just as in the Toronto real estate market, the condo market should be revived once Covid 19 is tamed. Yet demand for life in BC is so strong, even the new condo developments will see lots of offers in late 2021.
The Real Estate Board of Greater Vancouver include: Vancouver, Burnaby, New Westminster, Richmond, Whistler, Sunshine Coast, Squamish, West Vancouver, North Vancouver, 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.
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.
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REBGV is The Real Estate Board of Greater Vancouver, a member-based association of more than 14,000 REALTORS® who live and work in the Vancouver region.
The Canadian Real Estate Association (CREA) is one of Canada’s largest single-industry trade Associations. It’s membership includes more than 125,000 real estate brokers, agents and salespeople, working through 90 real estate Boards and Associations across Canada.