Vancouver Housing Market Report
It’s another strange month in the Vancouver housing sector as listings and sales jumped, yet what is available is barely affordable for most buyers.
Greater Vancouver homes sales saw a slight uptick in May amidst the highest supply of homes for sale. There are 14,685 homes for sale, up 30% compared to May 2018, and were up 2.3% compared to April. This is the highest since 2014.
Home sales were 23% below the long term average for May. It was the lowest May total since 2000. Sales of detached homes rose 54% over last month, while apartment sales rose 41% over last month.
Every month, it seems the Vancouver housing market suffers more. The culprits for this underperformance are government and other NIMBY’s, yet not many BC voters want to look at pro-housing solutions which would mean defeating the Nimbys. Too many people have abandoned their dreams having equity in a home.
Experts place blame on mortgage stress tests, yet mortgage rates have remained very low, and there’s been little support for housing development. High home prices can only fall if alternatives exist.
Home Prices in May
The benchmark price for a detached home rose .5% to $1,421,900. That was a big drop of 11.5% since May 2018.
Residential home sales in the GVA region totalled 2,638 last month. That was a 6.9% slump from the 2,833 of sold transactions last month. The bright side is that it was a 44.2% increase from the 1,829 homes sold in April. Is it a case of desperation or just that with so many more homes for sale?
Actually, 5,861 detached, attached and apartment properties were newly listed for sale on the Multiple Listing Service® (MLS®) in Metro Vancouver, down from 6,375 newly listed 12 months ago. The sales to listings ratio runs from 14% for houses to 21% for apartments.
Sales of detached homes fell 1.8%, and prices have plummeted 12.9% since last May. Apartment sales fell a whopping 12.9% and attached units fell .6%.
BCREA’s Cameron Muir’s April Housing Report
Premier Locked into Losing Policy
What’s happened to Vancouver’s housing market is political folly and it’s just now at end game that everyone can see it. With the current Premier in office until 2021, the outlook is grave. BC’s policies on housing will cost it $400 million in tax revenue and damage the BC economy for years to come.
The Conference Board of Canada estimates real GDP growth in B.C. will fall slightly to 2.5% and the downward trend will continue into 2020 with real GDP growth projected to fall to 2.4%. Growth in previous years was supported by revenue from the housing market.
Horgan’s Regression Just the Beginning
The anti-business lobby might appeal to some, but over years the lack of housing development begins to cause significant pain for everyone — renters, businesses, and for government taxes. In fact, this can cripple BC prosperity at a critical time and leave scars for years.
In order for BC’s economy to keep the status quo or progress, prices must moderate and availability grow. That’s simply not happening. The elected BC premier has done nothing to encourage developers and investors to contribute to building new housing in Vancouver.
There is only one remedy — more housing — meaning Horgan must be replaced with a pro-business, pro-housing, pro-future Premier. Horgan is playing on renter’s immediate desperation for living space (and BC rents are out of control due to lack of apartment development).
It’s a farce that BC businesses can’t find workers because there’s nowhere for them to live. This is what socialist policies do. His claim that speculator profits are to blame is laughable. Speculators are not in Vancouver, let alone bathing in money.
REBGV believes the flat sales and decrease in prices of late are due to rising interest rates and mortgage stress test rules. Truth is, they’re being nice to Horgan and not telling like it is. Once a downturn happens, Horgan will look foolish blocking investment (and Alberta oil). Anti-business always policies lead to disaster.
It’s disgraceful what’s happening in BC, and there’s no need for all this suffering. Bad people need to be removed and pro-business people brought in.
While sales plummet, prices aren’t. Come on Vancouver voters, it’s time to let investors back in. Find out who the evil ones behind the scenes are pushing this madness, and get this fixed. It’s up to you.
March MLS Homes Sales
Home listings continue to grow and sales continue to fall across the greater Vancouver housing market to the lowest levels since the great recession.
A total of 3976 properties were listed for sale in March on the MLS (up approx 30% from last month). Sellers are dumping their homes onto the market, but the price slide just won’t happen — too much demand. Only a recession (USMCA conflict) would crash the market.
The biggest drops in price of all type of homes were in Burnaby East (-1.1%), Burnaby South (-1.1%), Coquitlam (-1.1%), Port Coquitlam (-1.5%) and Tsawsassen (-2.5%).
The biggest increase in home listings were in North Vancouver, West Vancouver, and Richmond.
BC Housing Sales January
BCREA’s 1st Quarter report on the BC housing market forecasts home sales to grow 2.1% to 80,000 units this year, just above 2018’s total sales of 78,345 residential sales in 2018. They are predicting sales in BC to grow a further 6.9% to 85,500 units in 2020.
Collectively, BC buyers got the message that buying homes was not a good idea.
Chilliwack, Vancouver, and South Okanagan saw the biggest drops in sales from 40 to 50% down from last January.
BC Real Estate Forecast 2019
BCREA forecasts improving sales in 2019 after falling 23% this year. So far sales have only dropped. The 10 year average sales is 84,000 units and they’re expecting 89,500 transactions. However Cameron Muir, chief economist, says mortgage stress tests and rising interest rates are a drag on the economy. He mentions in the latest report, that favourable demographics and strong economic performance are keys to sales growth.
The elephant in the room is the disappearance of China to US goods flow, and we’ll discover how important that is in the next few months. BCREAS’s recent report show new construction numbers are high which sets us a risky situation if the economy fails.
Where is the Vancouver Housing Market Headed in 2019?
The loss of the China to US free trade business is more worrying than many anticipate. Less container traffic, less related import business, along with BC’s isolation in relation to the US markets will impact BC’s economy. And when will the best time to buy a house be?
The lull in the US economy is one reason price pressure has eased in Vancouver’s housing sector. As the US Fed raises its rates, Canadian interest and mortgage rates will rise a little by July. Vancouver’s surprisingly low unemployment rate continues at 4.4%. Investment in housing however is dropping as builders grow pessimistic about BC’s future.
Of course, if the US can keep its ship on course, the economy will stay strong and Vancouver home prices will rise once again. The question is, when will prices begin to rise in 2019?
Why? US economy will be weaker in first 3 months of 2019, Canadian regulators want higher mortgage rates and to suppress Heloc usage, and increasing stress test qualifications. And home and condo sales are trending down strongly (10 year low, inventories 6 year high). Momentum and expectations are for lower prices.
Vancouver’s economy perked up in September but fell back to earth in October. Home sales and prices fell again too, down 35% since last fall.
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.
Big Picture Warnings for BC
US companies imported like crazy before the Jan 1st US tariff deadline, and that means they’ll be importing much less in the first 3 months of 2019. This will hit BC exports. Canada’s battle with China will further impede International business and China dependent companies in BC could be in for a rough ride. That give more buyers pause for thought before buying at million dollar prices.
Next summer, the US will heat up. Find an agent now. Be prepared for this temporary opportunity.
Canada’s underperforming economy will continue to be torchered much like BCs housing situation for many years. The energy sector is dead, killing the Calgary housing market and that will raise Federal taxes. A low loonie will make precious Vancouver real estate very attractive. With foreign buyers subdued, Canadians might have their golden opportunity in perhaps what is the best city in the world (safety, education, employment, lifestyle recreation).
A Look Back at Last Fall
Monthly Vancouver Housing Stats report for October 2018:
- detached home sales fell 32%
- 13,000 homes for sale (42% more than last fall)
- 4900 new listings happened in October (+7%)
- total MLS listed resale homes currently listed for sale in Metro Vancouver is
12,984, a 42% increase
- sales of townhomes fell 37%
- attached homes sales fell 37%
- average price of a detached house reached $1,528,000 (down 5% from last October)
- sales of detached houses dropped 32%
- sales of apartments dropped 36%
- 23% increase in home sales compared to September 2018 when 1,595 homes were sold
- Vancouver resale market sales were 26.8% below the 10-year October average
- apartment price fell to $683,500, down 6% from October 2017
- MLS® Home Price Index composite benchmark price is up 1% from last October
Does this make Vancouver a good place to buy a home? The answer has to be yes. Whether it’s free trade or Trump protectionism, Vancouver comes out okay. The question of housing affordability is similar. Suppy never increases.
Sales to active listings ratio for single detached homes reached a depression level of 6.8% in Vancouver.
What happened in July of 2016? The Foreign Buyers Tax. Home prices dropped $200,000.
Yet BC still has the lowest unemployment rate in Canada, (4.2 % in October after 2% growth in September, +33,000 jobs) well ahead of Toronto. Wages could rise giving more impetus to the housing market. 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 to be created. The added investment will give the housing market in Vancouver a little boost and perhaps encourage more new construction. See the full running Vancouver housing market report below.
CMHC Housing Forecast 2019 2020
The housing forecast from CMHC isn’t so optimistic.
“Over the next two years, Metro Vancouver’s resale market will see lower sales, higher inventories of homes for sale and lower home prices compared with recent market highs.” – from CMHC media release
The newly released forecast from CMHC differs from BCREA’s report: “Resale market conditions in British Columbia have shifted significantly since the end of 2017 as higher mortgages rates, slower economic and population growth and housing-related policy changes have resulted in a 21 per cent decline in MLS Sales in the first eight months of 2018. Housing resales for B.C., peaked at 103,759 last year and were more than 100,000 in each of the two previous years. Those are expected to drop to around 80,000 this year and for the next two years.”
The CMHC forecast said their were 40,000 new home construction starts this year but they will fall to 2015 levels by the end of 2020. A good portion of 2018 sales numbers come from people migrating to the Okanagan. With a flagging economy that should cease.
However, as the US economy revives next summer, BC’s economic forecast should improve thus maintaining upward pressure on home prices.
BC Unemployment Rate Plunged to 4.2%
Greater Vancouver had a lot going for it and as demand grew from the overheating US economy. Yet in in early 2019, US demand will weaken. The BC economic department cites big growth in natural gas, timber, agriculture, manufacturing, services, and that value was focused directly 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.
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 turbulent path. As long as the loonie stays low (CAD US Conversion rate), the Vancouver and Toronto economies will be okay. Of course, this may be why there’s no pipelines leading out of Alberta.
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 and alleviate homelessness? 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. China is in trouble, and Chinese investors are buying in the US instead of 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, a trend continued in October.
The number of home listings rose 10.7% from August and up 38.2% from last September. This is a huge change and yet Vancouver home prices fell only 3% from August 2018, and yet were still up 2.2% from September 2017.
Sales of detached properties in September 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 were: West Vancouver, Squamish, Whistler, Port Coquitlam, Burnaby South, and Vancouver east
This chart courtesy of Terranet, shows Vancouver is clearly beyond anything in Canada (orange line at top) and 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.
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.
Please do use this report on Facebook or your Newsletter. Why do all the work yourself?
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.
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.
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.
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.