Vancouver metropolitan sales slacken, but prices remain elevated
Metro Vancouver home sales over the first quarter of this year were the lowest in five years, but statistics from the Real Estate Board of Greater Vancouver show prices remain high.
The board stated that home sales across the region in March tumbled 29.7% year-over-year, and are 23% below the 10-year March sales average.
Just over 2,500 homes changed hands last month, a drop of more than 1,000 compared to a year ago, although the board noted that March 2018 sales climbed 14% compared to February.
Listings of detached, attached, and apartment properties also declined by 6.6% last month compared to March 2017, marking the region’s lowest total of first-quarter new listings since 2013.
Real estate board data showed the number of sales compared to the number of active listings soared to 61.6% for condominiums in March, while the rate was 39.9% for townhomes, well above the 20% rate that has been estimated to tend to push prices upward.
The composite benchmark price for all residential properties in Metro Vancouver stood at $1,084,000, a 16.1% increase over March 2017 and a 1.1% increase since February 2018.
REBGV president Phil Moore said that even with lower sales, prices will remain high as long as the selection of properties is slim.
“Last month was the quietest March for new home listings since 2009 and the total inventory, particularly in the condo and townhome segments, of homes for sale remains well below historical norms,” Moore stated in a news release, as quoted by The Canadian Press.
“High prices, new tax announcements, rising interest rates, and stricter mortgage requirements are among the factors affecting home buyer and seller activity today,” Moore added.
The benchmark price for detached properties was $1,608,500 last month, up 7.4% from March 2017 and up less than 0.5% over February 2018, as sales-to-active listings nudged the mark where the board said downward pressure on prices could occur.
With sales outstripping supply for condos and townhomes, the benchmark price for a condo was $693,500 in March, a 26.2% leap from March 2017 and a 1.6% bump compared to February 2018.
Benchmark prices for townhomes across Metro Vancouver reached $835,300 last month, a 2% increase over February and a hike of 17.7% from March 2017.
Home buyer demand depends on property type
Attached and apartment homes are in demand across Metro Vancouver while detached home buyers are facing less competition today.
The Real Estate Board of Greater Vancouver (REBGV) reports that residential home sales in the region totalled 1,818 in January 2018, a 19.4 per cent increase from the 1,523 sales recorded in January 2017, and a 9.8 per cent decrease compared to December 2017 when 2,016 homes sold.
Last month’s sales were 7.1 per cent above the 10-year January sales average. By property type, detached sales were down 24.8 per cent from the 10-year January average, attached sales increased 14.3 per cent and apartment sales were up 31.6 per cent over the same period.
“Demand remains elevated and listings scarce in the attached and apartment markets across Metro Vancouver,” Jill Oudil, REBGV president said. “Buyers in the detached market are facing less competition and have much more selection to choose. For detached home sellers to be successful, it’s important to set prices that reflect today’s market trends.”
There were 3,796 detached, attached and apartment properties newly listed for sale on the Multiple Listing Service® (MLS®) in Metro Vancouver in January 2018. This represents an 8.3 per cent decrease compared to the 4,140 homes listed in January 2017 and a 100.7 per cent increase compared to December 2017 when 1,891 homes were listed.
The total number of properties currently listed for sale on the MLS® system in Metro Vancouver is 6,947, a four per cent decrease compared to January 2017 (7,238) and a 0.2 per cent decrease compared to December 2017 (6,958).
For all property types, the sales-to-active listings ratio for January 2018 is 26.2 per cent. By property type, the ratio is 11.6 per cent for detached homes, 32.8 per cent for townhomes, and 57.2 per cent for condominiums.
Generally, analysts say that downward pressure on home prices occurs when the ratio dips below the 12 per cent mark for a sustained period, while home prices often experience upward pressure when it surpasses 20 per cent over several months.
The MLS® Home Price Index composite benchmark price for all residential homes in Metro Vancouver is currently $1,056,500. This represents a 16.6 per cent increase over January 2017 and a 0.6 per cent increase compared to December 2017.
Detached home sales in January 2018 reached 487, a 9.7 per cent increase from the 444 detached sales recorded in January 2017. The benchmark price for detached properties is $1,601,500. This represents an 8.3 per cent increase from January 2017 and a 0.3 per cent decrease compared to December 2017.
Apartment home sales reached 1,012 in January 2018, a 22.7 per cent increase compared to the 825 sales in January 2017. The benchmark price of an apartment property is $665,400. This represents a 27.4 per cent increase from January 2017 and a 1.5 per cent increase compared to December 2017.
Attached home sales in January 2018 totalled 319, a 25.6 per cent increase compared to the 254 sales in January 2017. The benchmark price of an attached unit is $803,700. This represents a 17.5 per cent increase from January 2017 and unchanged compared to December 2017.
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Home prices in Metro Vancouver are expected to rise again in 2018, as “exceptionally” low inventory pushes up cost, according to Royal Lepage’s latest market forecast.
The real estate agency’s survey, released Wednesday, says prices increased in the fourth quarter of 2017, and predicts prices will continue to go up by 5.2 per cent by the end of the year.
The survey found that the aggregate home price in Greater Vancouver increased 8.2 per cent to $1,267,769 in the three months leading up to December, compared with the same period last year.
The largest increase was in the median price of a condo, which surged 20.2 per cent during those months to $651,885. The increases were highest in North Vancouver (26.8 per cent) followed by Burnaby (25.1 per cent) Langley (23.4 per cent) Richmond (19.5 per cent) and Coquitlam (18.8 per cent.)
The cost of a bungalow in Metro Vancouver went up 5.3 per cent to $1,436,606, while a two-storey home increased 6.6 per cent to $1,586,991.
The survey found there was double-digit growth in the city of Vancouver, where prices rose 12 per cent to $1,480,712, and in Burnaby and Coquitlam, rising 10.3 per cent and 11.1 per cent year-over-year to $1,115,541 and $1,064,247, respectively.
Surrey’s aggregate home price also saw a double-digit increase in the fourth quarter, rising 10.7 per cent to $844,869.
As buyers continued to search for reasonably priced homes near the downtown core, home values went up 5.7 per cent in North Vancouver to $1,459,570. Yet it was the area’s condominium growth that stood out. The survey says North Vancouver posted one of the largest annual gains of any property segment tracked in the nation, surging 26.8 per cent to $673,313.
Royal LePage says the prospect of new mortgage rules making it more difficult to purchase a home may have drawn prospective homeowners back into the market to compete for somewhat affordable property.
The agency’s general manager Randy Ryalls says home values have continued to strengthen in the region, particularly in the entry-level market where competition for available property is stiff.
“With each passing day, purchasers are becoming more attuned to the new price environment and consumer confidence strengthens,” he said in a release Wednesday.
“Until something is done to address current inventory levels, we will likely continue to see significant home price growth in Greater Vancouver’s future, even if demand is reined in,” said Ryalls.
On Jan. 1, new mortgage rules imposed by the Office of the Superintendent of Financial Institutions came into effect. The rules, which limit a buyer’s ability to purchase a home, are aimed at curbing Canadians’ debt levels.
Ryalls said that although the new rules may slow errant home-purchasing behaviour, it’s unlikely to bring prices down, and will push more buyers into the entry-level market, causing the price of condos and townhomes to inflate further.