Metro Vancouver Residental Housing Market Highlights
Metro Vancouver home sales return to historically typical levels
After a quieter first half of 2019, home buyer activity has returned to more historically typical levels in Metro Vancouver.
The Real Estate Board of Greater Vancouver (REBGV) reports that residential home sales in the region totalled 2,498 in November 2019, a 55.3 per cent increase from the 1,608 sales recorded in November 2018, and a 12.6 per cent decline from the 2,858 homes sold in October 2019; October 2019 totalled 2,858, is a 45.4 per cent increase from the 1,966 sales recorded in October 2018, and a 22.5 per cent increase from the 2,333 homes sold in September 2019; September 2019 totalled 2,333, a 46.3 per cent increase from the 1,595 sales recorded in September 2018, and a 4.6 per cent increase from the 2,231 homes sold in August 2019.
The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $993,700. This represents a 4.6 per cent decrease from November 2018 and a 1.3 per cent decrease over the past six months.
Last month’s sales were four per cent above the 10-year November sales average.
"We started to see more home buyer confidence in the summer and this trend continues today. It’ll be important to watch home listing levels over the next few months to see if supply can stay in line with home buyer demand." Ashley Smith, REBGV president.
There were 2,987 detached, attached and apartment homes newly listed for sale on the Multiple Listing Service® (MLS®) in Metro Vancouver in November 2019. This represents a 13.7 per cent decrease compared to the 3,461 homes listed in November 2018 and a 26.7 per cent decrease compared to October 2019 when 4,074 homes were listed.
The total number of homes currently listed for sale on the MLS® system in Metro Vancouver in November is 10,770, a 12.5 per cent decrease compared to November 2018 (12,307) and a 12 per cent decrease compared to October 2019 (12,236). In October is 12,236, a 5.8 per cent decrease compared to October 2018 (12,984) and a nine per cent decrease compared to September 2019 (13,439). In September is 13,439, a 2.7 per cent increase compared to September 2018 (13,084) and a 0.3 per cent increase compared to August 2019 (13,396).
For all property types, the sales-to-active listings ratio for November 2019 is 23.2 per cent, for October 2019 is 23.4 per cent, for September 2019 is 17.4 per cent.
Generally, analysts say downward pressure on home prices occurs when the ratio dips below 12 per cent for a sustained period, while home prices often experience upward pressure when it surpasses 20 per cent over several months.
“In today’s market, the intensity of home buyer demand depends on neighbourhood, property type, and price point,” Smith said. “To better understand the changing trends in your neighbourhood and property type of choice, it’s important to work with your local REALTOR®.”
Metro Vancouver Commercial Market Highlights
Commercial real estate sales down from last year’s pace
Sales activity in the Lower Mainland’s commercial real estate market declined in the second quarter (Q2) of 2019 compared to the more active market experienced in the region last year.
There were 407 commercial real estate sales in the Lower Mainland in Q2 2019, a 32.6 per cent decrease over the 604 sales in Q2 2018. The total dollar value of commercial real estate sales in the Lower Mainland was $1.463 billion in Q2 2019, a 65.6 per cent decrease from the $4.253 billion in Q2 2018.
“The reduced activity in the commercial market has largely mirrored what we saw in the residential market through the first half of 2019,” Ashley Smith, REBGV president said. “Residential demand did pick up in the summer months. How this change will affect the commercial market remains to be seen.
Vancouver Empty Home Tax Highlights
The City of Vancouver's Empty Homes Tax has brought in nearly $40 million in net revenue since it was introduced two years ago, it also decreases the number of vacant and exempted properties across the city significantly.
"The main objective of Vancouver’s Empty Homes Tax is to influence property owners to put their empty properties on the rental market and the data shows that is happening," said Mayor Kennedy Stewart in a news release announcing the report's findings.
the majority of the exempt and vacant properties are condominiums, which account for 58% of combined exempt and vacant properties.
The vast majority of exemptions were for properties that were either changing hands (40 per cent claimed a property transfer exemption) or being renovated (another 34 per cent claimed this exemption), a finding that is notable because it suggests the exemptions are temporary. Other exemptions - specifically, the exemption for strata buildings that have bylaws prohibiting owners from renting out their units - are more permanent. Some 14 per cent of exemptions claimed in 2018 were due to strata restrictions, according to the annual report.
The number of "tenanted" properties in the city increased from 46,770 in 2017 to more than 50,000 in 2018, an increase of seven per cent.
Money raised through the EHT is used to fund affordable housing initiatives. Nearly half of the roughly $40 million the tax has brought in so far has been allocated to the city's recently approved "Community Housing Incentive Program," which will provide grants to non-profit organizations that run social and co-op housing. Some $17 million has been allocated to the program.
Other uses of the funds include the purchase of Ross House, an SRO hotel in the Downtown Eastside, for $3.8 million, as well as additional support services for renters worth $5.8 million.
Vancouver's empty homes tax is going up by 25 per cent starting next year (2020), and there will be more increases to come, following a decision by city council. The motion, brought forward by Vancouver Mayor Kennedy Stewart and approved by council Nov 27th, also allows for increases in 2021 and 2022.
Right now, properties deemed empty will still be subject to a tax of 1% of the property’s 2019 assessed taxable value. How to declare?
Changes to B.C. building code address secondary suites
The British Columbia government has announced changes to the building code that expand options for secondary suites in multi-family buildings. The change will give local governments the choice to allow secondary suites in side-by-side multi-family buildings such as duplexes, townhouses and row housing, but does not apply to apartment-style buildings where units are above or below each other.
This change will help create more affordable housing, while ensuring buildings in B.C. meet health, safety and energy-efficiency standards. Size restrictions for secondary suites are also being removed from the provincial building code, which applies throughout B.C. except for some federal lands and the City of Vancouver. The provincial code does not set a minimum size, which means local governments may set their own restrictions for secondary suites.
It will be up to municipalities to decide whether to embrace the changes and amend zoning and development bylaws to allow the secondary suites. Earlier this year, the province also announced it was changing the building code to allow 12-storey wood buildings, up from the previous limit of six storeys.
The changes to the B.C. building code are set to apply to building permit applications on or after Dec. 12.