Sales in Metro Vancouver continued to slide in the month of August with sales down 36% compared to August last year. The other major markets in the province had similar trends with the Fraser Valley being hit the hardest with a 38.5% decrease in sales compared to August 2017. Vancouver, the Fraser Valley and the Central Okanagan all saw significant increases in active listings compared to August 2017. Many realtors in Vancouver believe that sales in the city have already started to plummet more dramatically than the Real Estate Board’s figures would suggest.
IN THE NEWS
Vancouver’s housing sales hit a six-year low in August as buyers appear to no longer be in the rush they once were to enter or remain in the real estate market. The Real Estate Board of Greater Vancouver announced that residential sales were down 36.6% compared to August 2017. The 1,929 sales represent the lowest number of sales since 2012. Josh Gordon, assistant professor at SFU’s School of Public Policy says, “the demand-side policies are having a cooling effect on the market.”
A number of Vancouver realtors believe that a significant decline is happening in Metro Vancouver home prices, despite the official statistics providing more muted signals. Realtor Ian Watt uses independent figures including median prices from SnapStats Publishing Company, Watt says those statistics show that homes on Vancouver’s west side have fallen 26 percent in a year, dropping by almost $1 million. The numbers in West Vancouver are even more pronounced, where prices have fallen by 30 percent or $1.1 million since December 2017. These numbers don’t necessarily correspond to the Real Estate Board of Greater Vancouver’s figures which use a benchmark composite intended to reflect a “middle of the pack” home in terms of bedrooms, square footage and other factors.
E-commerce companies such as Amazon.com are driving the need for more industrial and warehouse space in Vancouver. The need for more logistics and storage space in urban centres is the result of consumers demanding quick online deliveries which forces companies to carry more inventory in the cities where the majority of deliveries will take place.
As a result, Vancouver is the world’s hottest industrial real estate market with lease rates up 29% in the 1st quarter compared to last year – the global average is 3%.
Industry forecasts indicate that industrial land may run out within a decade, with some predicting as early as 2020. Robin Silvester, CEO of the Port of Vancouver, has long warned that once that inventory runs out Vancouver will relegate the city to being a playground for wealthy retirees and tourists.
In a recent survey, voters in the City of Vancouver, the North Shore, and Burnaby/New Westminster have serious concerns about affordable housing. While voters in Richmond, Surrey, and the Tri-Cities say that development is moving too quickly. Board of Trade president Iain Black says that the disconnect between residents of different cities could be solved by addressing transit and transportation, the second key issue among voters.
BC UNEMPLOYMENT RATES
|Regions||Rate from August to September 2018||Rate from July to August 2018|
Table source: http://srv129.services.gc.ca/ei_regions/eng/rates_cur.aspx
REAL ESTATE ACTIVITY BY REGION
- Units sold: 36.6% decrease from August, 2017
- Active listings: 34.3% increase from August, 2017
- New listings: 8.6% decrease from August, 2017
- Benchmark price: $1,561,000 (2.4% decrease over last 6 months)*
- Units sold: 19.3% decrease from August, 2017
- Active listings: 31.4% increase from August, 2017
- Benchmark price: $888,300 (6.9% increase from August, 2017)*
- Units sold: 1.4% decrease from August, 2017
- Active listings: 8.4% decrease from August, 2017
- New listings: 4.9% decrease from August, 2017
- Average residential price: $381,525 (5.8% increase from August, 2017)
- Units sold: 38.5% decrease from August, 2017
- Active listings: 28.5% increase from August, 2017
- New listings: 2.2% decrease from August, 2017
- Benchmark price: $1,008,700 (2.9% increase from August, 2017)*
- Units sold: 24.0% decrease from August, 2017
- Active listings: 23.9% increase from August, 2017
- New listings: 4.0% increase from August, 2017
- Average residential price: $568,210 (7.6% increase from August, 2017)
*Benchmark based on the MLS HPI® benchmark for single family detached homes.