Vancouver Housing Market Update
Vancouver’s stats and outlook are very similar to Toronto’s housing market report where strong demand and migration trends occurred. The Vancouver market is marked by decreasing listings, growing demand, homeowners fearful to make a move, an uncertain economy still hampered by the Corona Virus, mounting city debt, and continued high taxation on real estate.
Through the last 4 months of the pandemic, house prices have risen while apartment condo prices have fallen. See the home price chart below for the latest home prices in each district. Home buyers were asking in 2019 whether Vancouver home prices would drop in 2020, and they didn’t. The wish never comes true.
So far BC residents have responded well to social distancing and caution, and a good guess that containment will continue. The back to work and back to school events this fall are worrying, but if there are outbreaks, the BC government will respond quickly.
Despite what the CMHC says about 2021, home, apartment, townhouse and condo units will cost more in 2021. CMHC’s forecast for housing starts is decidedly unclear with a big upper and lower range. Keep in mind, that recessionary calls in the housing market have persisted for many years, with no such result.
You have to take economic expert forecasts with a grain of salt. They did not foresee people holding onto their homes so stubbornly or the exodus from apartment buildings and downtown areas due to the work at home trend and fear of Covid 19. These events are real and are affecting sales in Vancouver.
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 Browns housing forecast.
Vancouver Home Sales Stats July 2020
Residential home sales in greater Vancouver rose to 3,128 units in July 2020. That was a 22.3% jump from the 2,557 sales last July 2019, and up 28% from the 2,443 homes sold last month.
July’s sales were a whopping 9.4% above the 10-year July sales average, so July is a real positive sign for residential real estate in Vancouver.
Colette Gerber, REBGV Chair believes that pent up demand is the primary reason for the jump in sales. She also reiterated the importance of virtual listings and showings as in person interactions between Realtors and home buyers and sellers. Given Vancouver is a condo dominated market, reducing the risks of Covid 19 are important.
In July, 5,948 detached, attached and apartment properties were newly listed for sale on the MLS in Metro Vancouver. That represented a 28.9% grow compared to last July when 4,613 homes were listed. Month to month growth of listings was up 2.8 per cent over June’s totals when 5,787 homes were listed.
Vancouver home prices rose 4.5% in July compared to 12 months ago, and are up .6% since last month. The MLS® Home Price Index composite benchmark price for all types of properties is up to $1,031,400.
Sales of apartments jumped 12.6% to 1,400 units in July 2020 (there were 1243 sales in July 2019). The average price of an apartment rose 4.1% in July to $682,500. That is a 0.3 per cent rise over last month.
Listings dropped by a large 15.1% from last year and fell 5.8% from last month Currently, there are 12,083 properties for sale, and last month there were 11,424 properties for sale.
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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The sales-to-active listings ratio for July 2020 was 25.9%: 25.1% for single detached homes, 31.1% for townhomes, and 24.7% for apartments.
The Forecast for Vancouver’s Housing Market
CMHC has forecasted a dour outlook for the next two years, with the trough appearing in 12 months. Vancouver’s economy will certainly be challenged however with the positive outlook for a vaccine, we could see huge demand in 2021 when the vaccinations are in full swing.
Low low mortgage rates are definitely on the side of buyers. If an economic crash should happen with a Democrat win in the election, then of course, all Canadian housing markets will be hit hard.
Besides Covid 19 and vaccines, the forecast for 2020 and 2021 perhaps is the loonie falling back to 70 Cents USD. Low CAD vs USD always picks up Canada’s competitiveness and production and exports begin to grow, and real estate becomes cheaper for foreign buyers. Vancouver is still a key port for Canadian exports, and as imports grow the Vancouver terminal should be busy.
How odd it is that BC was counting on the TransCanada oil pipeline and the LNG project in Prince George for liquified gas revenue. Both natural gas and oil prices have plummeted although they’re picking up of recent to $46 a barrel. It’s up in the air whether Alberta, the Federal Government and the oil companies will have any cash for the Transmountain project.
BCREA Economic Dashboard
Unemployment up, home sales plummeting, and house prices falling across the province.
And Canadian economists were holding out hope for increased China US trade which is very unlikely to happen in 2020 or 2021 with the deficit created by the Corona Virus pandemic.
With the Saudis are vowing to pour 13 million barrels of oil on the oil markets for many months. The low price oil will shatter real estate markets in Dallas, Denver and Calgary. However it should fire up the economies in Los Angeles, New York and in Florida.
Once the Saudis realize this, they may pull back on production. But for now, Vancouver, Toronto and Montreal will enjoy the cheap oil, while Calgary and Alberta will not so much. Incidentally, Calgary and Edmonton may soon offer the best real estate bargains in North America ahead of even Texas and Colorado.
Vancouver Housing Price Timeline
Cities covered under the jurisdiction of the Real Estate Board of Greater Vancouver include: Burnaby, Coquitlam, Vancouver, West Vancouver, Richmond, Whistler, Maple Ridge, New Westminster, North Vancouver, Pitt Meadows, Port Coquitlam, Port Moody, South Delta, Squamish, and the Sunshine Coast. See housing prices for each city below. See also mls sales stats for Kelowna Vernon Penticton.
Here’s a great look at the recent history of home listings in the GVA
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.
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.
It’s disgraceful what’s happening in BC, that new housing isn’t being built. Bad people need to be removed and pro-business people brought in. 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 homelessness issues.
The biggest increase in home listings were in North Vancouver, West Vancouver, and Richmond.
Where is the Vancouver Housing Market Headed in 2021?
The loss of the China through Vancouver 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.
The lull in the US economy is one reason price pressure had eased in Vancouver’s housing sector and the US is facing some potential crashes in its housing market and stock markets. Vancouver’s surprisingly low unemployment rate continues at 4.4%. Investment in housing however is dropping as builders grow pessimistic about BC’s future.
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.
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 is likely upset with how he regained the prime minister’s office. With Trudeau, Canada and Vancouver can never be at ease about economic health and market flows and investment.
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.
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.