Vancouver Housing Market Update and Forecast
Vancouver has built its reputation as one of the most beautiful cities and locations in the world. And now that California is not what it used to be, Vancouver and BC (Kelowna too) are more attractive to many foreign home buyers from Asia.
Like California, there is no end to the demand for housing here. The forecast for the Greater Vancouver real estate region is an even stronger market.
The modernization of the city, incredible mountain vistas, moderate climate with a surprising amount of yearly sunny days, high tech center growth, tourism and neighbouring mountain recreation areas makes this area a paradise to many. Sales are predicted to fall by 7,000 province wide in 2022, and be down by 4,000 in the Lower mainland according to Central 1. Home prices are expected to rise another $32,000 next year on the lower mainland and up $22,000 province wide. You can read more on the provincial forecasts in detail below.
The average, benchmark home price has reached a phenomenal $1,186,100, up 13.8% from 12 months ago. As the pandemic ends, it’s obvious home prices will surge upward since new development can’t keep pace. Demand is spilling over the rental sector and new rentals must be built.
Vancouver home prices have doubled on average in the last 10 years, which may be a meagre growth compared to gains in the stock market in the same period. Yet anyone putting their Vancouver home for sale will be earning a shocking return on that sale. This is an ideal time to call a Vancouver Realtor and get the process started.
There are currently 9,235 homes listed for sale on the MLS® system in Metro Vancouver. That’s 29.5% less than 12 months ago although it’s a 2.6% rise vs last month. Housing supply is 27.7% below the 10-year average for the month of September.
Vancouver is Canada’s priciest housing market. Build some condos and duplexes, and more people arrive in BC requiring more condos and duplexes. It will never end which does encourage Vancouver’s home owners to become true NIMBYs and try to prevent development in the city. Even NIMBY action, so deluded, still isn’t able to stop development and higher home prices in the city.
The higher Vancouver real estate prices rise, the more lucrative and desirable it is to invest there. Although they suppress housing supply in the short term, that demand and wealth is carried forward, sort of kicked down the road to reappear more intensely. Foreigners kicked out of the Canadian housing market, will simply wait for several years to get in.
It’s inevitable in the “global, free trade era” our Canadian government foisted upon us decades ago. And trade is the name of the game in Vancouver as a major Canadian port. That business should carry on as usual, however the cost of energy combined with ultra high home prices could make living the city unbearable for too many. A new housing development program is needed.
Vancouver and BC didn’t suffer as badly as the rest of the country during the pandemic, however the September jobs report was a little concerning.
Of course the price of homes in Vancouver is perhaps beyond the working class’s capacity, but when the economy struggles, it would impact housing demand going forward, even from the wealthy.
Justin Trudeau is wanting to pass laws which would discourage foreign buyers from buying in Vancouver. Foreigners own so much real estate in Vancouver already that a little more won’t hurt. However, encouraging foreign buyers to consider the Okanagan, or Calgary and Edmonton is not such a bad idea. The real estate investment boom has lifted Vancouver’s quality of life and prosperity to astonishing heights. Normally, cities earn their wealth through other lines of production, and slowly at that.
October Housing Market Stats for Vancouver Region
Zolo announced October sales so far and it appears sales and prices are rebounding from September’s brief dip. See their data below by numbers of bedrooms.
New Housing Development in Vancouver
New stats from BChousing.org show construction activity is up in 2021, a very good trend.
The real story of the Vancouver real estate scene is purpose built built to rent units.
Home Prices by City
Home Sales in September
The Real Estate Board of Greater Vancouver (REBGV) stats show 3,149 home sales in September 2021, a 13.6% fall from the 3,643 sales recorded in September of 2020. It was just a 0.1 per cent decrease from the 3,152 homes sold in August 2021.
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 and Calgary housing market is for 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.
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.
Please do Share on Facebook with your Friends!
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. Prices did rise fast giving credence to Brown’s housing forecast.
BCREA is its housing forecast is all onboard with a prediction of rising sales in 2021. Sales in 2021 has been brisk. Brendon Ogmundson, BCREA’s Chief Economist said in an earlier forecast that the BC residential sales would grow 9.7% to 99,240 units in 2021, however those estimates were crushed.
A recent BCREA report shows sales in B.C. will rise 29% to more than 120,000 units through 2021. That is up from 94,000 sales in 2020. They forecast sales to decline 15% to 102,000 units in 2022.
“While we do not anticipate a repeat of the record-setting market of 2021, we do expect housing market activity to remain vigorous in 2022,” added Ogmundson.
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.
Share the Joy about British Columbia and Vancouver
Please Mention this post on your blog!
Real Estate Market Forecast | Toronto Housing Market Forecast | Forecast for Toronto Condo Market | Visit Vancouver | Vancouver Condos | Calgary Housing Market Outlook | Kelowna Vernon Penticton Housing Market | Mississauga Real Estate Forecast | Montreal Real Estate Forecast
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.