Residential Property Sales in Metro Vancouver
Steady demand and low supply benefits home sellers
VANCOUVER, BC – March 3, 2020 – February saw steady home buyer demand and reduced home seller supply across Metro Vancouver*.
The Real Estate Board of Greater Vancouver (REBGV) reports that residential home sales in the region totalled 2,150 in February 2020, a 44.9 per cent increase from the 1,484 sales recorded in February 2019, and a 36.9 per cent increase from the 1,571 homes sold in January 2020.
The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $1,020,600. This represents a 0.3 per cent increase over February 2019 and a 2.7 per cent increase over the past six months.
2020 February Metro Vancouver Market Highlights
Sales of detached homes reached 685. The benchmark price for a detached home is $1,433,900.
Sales of attached home reached 404. The benchmark price of an attached home is $785,000.
Sales of apartment homes reached 1,061. The benchmark price of an apartment property is $677,200.
There were 4,002 detached, attached and apartment homes newly listed for sale on the Multiple Listing Service® (MLS®) in Metro Vancouver in February 2020. This represents a 2.8 per cent increase compared to the 3,892 homes listed in February 2019 and a 3.4 per cent increase compared to January 2020 when 3,872 homes were listed.
The total number of homes currently listed for sale on the MLS® system in Metro Vancouver is 9,195, a 20.7 per cent decrease compared to February 2019 (11,590) and a 6.7 per cent increase compared to January 2020 (8,617).
“Home buyer demand again saw strong year-over-year increases in February while the total inventory of homes for sale struggled to keep pace,” Ashley Smith, REBGV president said. “This was most pronounced in the condominium market. Our Realtors are reporting increased traffic at open houses and multiple offer scenarios in certain pockets of the market. If you’re considering listing your home for sale, now is a good time to act with increased demand, reduced competition from other sellers, and some upward pressure on prices."
For all property types, the sales-to-active listings ratio for February 2020 is 23.4 per cent. By property type, the ratio is 17.3 per cent for detached homes, 26.9 per cent for townhomes, and 28.4 per cent for apartments.
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.
Commercial Property Sales in Metro Vancouver
Commercial real estate activity remains below the pace of recent years
Vancouver, B.C. – December 12, 2019 – Sales activity in the Lower Mainland’s commercial real estate market continued to decline in the third quarter (Q3) of 2019 compared to recent years.
There were 405 commercial real estate sales in the Lower Mainland in Q3 2019, a 32 per cent decrease over the 596 sales in Q3 2018 and a 42.3 per cent decline compared to Q3 2017, according to data from Commercial Edge, a commercial real estate system operated by the Real Estate Board of Greater Vancouver (REBGV).
The total dollar value of commercial real estate sales in the Lower Mainland was $1.886 billion in Q3 2019, a 59.8 per cent decrease from the $4.694 billion in Q3 2018.
“Activity in our commercial market this year is trailing the pace we’ve experienced over the last five years,” Ashley Smith, REBGV president said. “We’ve seen activity pickup in our residential market over the last few months and we’ll watch to see if conditions strengthen on the commercial real estate side in the last quarter of 2019 or the first quarter of next year.”
Redefining the Neighbourhood
A growing number of master-planned communities, such as Brentwood Town Centre and Oakridge Centre, are set to deliver thousands of new housing units and significant new retail space along the major transit corridors
in Metro Vancouver. The full slate of mixed-use amenities planned for each site will help redefine the surrounding neighbourhoods for years to come.
No Relief in Vacancy for Office and Industrial
Despite each of Vancouver's office and industrial sectors ending 2019 with 5.5 million Sq.Ft. of new nconstruction underway, combined preleasing of 57% means this near record setting wave of development will not provide significant relief to the city's historically low vacancy rates in the new year. It is expected that continued tightness should support rent growth in both sectors in 2020.
source: CBRE, Commercial Edge
ECONOMICS Market Intelligence
Sketching Out the Potential Impact of COVID-19 on the BC Housing Market
- While it's unknown how the unfolding COVID-19 outbreak will impact the economy in the long-term, BC is facing a sudden stop in economic activity with little guidance to when things may return to normal.
- Based on the scenario analysis, BC home sales and prices will likely face declines in the spring and early summer but should recover along with the wider economy in the second half of the year, contingent on the outbreak resolving.
- The postponed change to the mortgage stress test rate, originally slated for April 6, 2020, will mute the impact of falling interest rates for the BC housing market.
A steep decline in interest rates is already been seen, however it’s unknown how severe the impact will be on economic activity. Global supply chains will be impacted, as well as tourism and travel. The magnitude of impact is expected to vary by province but may be significant for the BC economy given the importance of tourism to the economy and the strong trade linkages with China. The additional shock to the Canadian economy due to a collapse in oil prices – itself the by-product of a price war between the world’s largest oil producers due to COVID-19 – makes the probability of a recession in Canada that much higher.
Real estate is a face-to-face business, so practices that are necessary to prevent the spread of the virus are at odds with buying and selling homes. This may produce stronger impacts than we can model using standard frameworks. As guidance, and reflecting on the immense uncertainty surrounding the economic outlook, the following several scenarios are based simulations:
As for home prices, the growth slowdown and associated decline in transactions will likely cause a temporary but modest swoon in home prices, which are then expected to recover to baseline over the next year as growth recovers. The simulations show that a much lower qualifying rate would lead to home prices in some BC markets ending the year higher than the pre-COVID-19 baseline. This result is likely why the Federal Government has opted to postpone the change. However, given the uncertainty surrounding the outlook, this may ultimately be a mistake. If the growth outlook deteriorates, the housing market may need a lower qualifying rate to fully recover.
The results of these simulations are far from definitive, but they provide a framework for thinking through the potential magnitude of the impacts of the COVID-19 outbreak. Most important to remember is that this period, no matter how unusual and anxious it is now, will pass and the economy and housing market will return to health.
How to navigate today’s housing market given COVID-19 concerns
Concerns about COVID-19 continue to increase across the country and around the world, and measures to deal with the illness are impacting our daily lives.
Economists and elected leaders agree that the COVID-19 pandemic will cause economic activity to slow, which will likely impact the housing market. With that in mind, the Bank of Canada recently lowered the overnight rate as a proactive measure to ease the negative impact of COVID-19 on the Canadian economy. Demand for homes last month saw significant year-over-year increases, and preliminary reports from this month show a similar trend.
It’s important to talk with your REALTOR® and make decisions based on the latest guidance from local health experts and relevant government agencies.
Here are some COVID-19 resources to follow the latest guidance:
- BC Centre for Disease Control FAQ
- Health Canada: COVID-19 Prevention and Risks
- World Health Organization advice to the public
Everyone’s situation is unique. It’s important to discuss and assess your personal situation in terms of health, risk, and your short and long term housing needs.
If you’re a buyer, do you want to attend a showing of a home? Are there virtual showings and other technology-based alternatives to face-to-face encounters?
If you’re a seller, do you want to host a showing or an open house? If so, what limits and sanitary processes should you put in place?
Have these conversations with your Realtor.
First and foremost, it’s important for everyone to:
- not gather in groups of 50 or more people;
- stay home and avoid others if you feel ill;
- avoid all non-essential and self-isolate for 14 days if you’ve recently travelled abroad;
- regularly wash your hands;
- avoid social greetings such as handshakes; and
- limit social interactions that could lead to the spread of illness.
This is a fast-evolving situation. Guidance from public health experts is changing daily. Be sure to follow the latest information from reputable sources.