Signs from this past month’s real estate market seem to indicate that some of the government measures aimed at cooling the real estate market may be starting to have some success. Every major market in British Columbia saw decreases in sales of over 20% compared to March of 2017. The Greater Vancouver market saw March 2018 sales decrease significantly; however, prices only decreased by one-half of a percentage point overall. Townhomes and condominiums continued to be the strongest segment of the Greater Vancouver market.
IN THE NEWS
There is growing uncertainty around the recreational property market in British Columbia amid the province’s planned speculation tax which is to include properties located in Metro Vancouver, Kelowna, West Kelowna, Nanaimo, Victoria, Abbotsford, Mission and Chilliwack. Thousands of Alberta and Saskatchewan residents own properties in areas that the tax is planned to impact. An owner of a home in one of the areas identified who doesn’t live in B.C. and doesn’t rent out the property for at least 6 months of the year, will be subject to the new speculation tax. Richard Osborne, of LandQuest Realty Corp. says, “It’s clearly not a speculation tax,” as a true speculation tax would apply to people who profit from flipping houses in short periods of time.
Despite a significant drop in sales, lofty real estate prices remain in Vancouver. March saw an almost 30% decline in sales compared to March 2017 while the benchmark price for a property in Greater Vancouver rose by 16% compared to March 2017 and rose 1% compared to February 2018. Real Estate Board of Greater Vancouver president Phil Moore says that even with lower sales, prices will remain high as long as supply remains low. However, the overall increase in prices hides the fact that detached home prices fell from $1.74 million in February 2018 to $1.61 million in March 2018.
Young Canadians are at the forefront of the overall increase in buying intentions across the country according to RBC’s annual homeownership poll. According to the poll, one-third of Canadians are very likely or somewhat likely to buy a home in the next two years, an increase of seven points from last year.
Millennials showed the strongest intention to buy, with 50% of those aged between 18-34 saying they were very or somewhat likely to purchase in the next couple of years.
Additionally, the poll showed that over half of respondents said the new stricter lending guidelines were affecting their purchase decisions, with 25% electing to make larger down payments and 19% delaying their purchase.
The average price of a townhome in Vancouver has reached a new high at $966,221 in March, a 16.3% increase over the same month in 2017 according to the Real Estate Board of Greater Vancouver. The condominium and townhouse markets have been on an upward trend since early 2017 after a slump in the second half of 2016. Phil Soper, CEO of Royal LePage says, “Prices in Greater Vancouver are so expensive, relative to the rest of the country. And when buyers see prices dip, they leap in.”
BC UNEMPLOYMENT RATES
||Rate from Mar to Apr 2018
||Rate from Feb to Mar 2018
Table source: http://srv129.services.gc.ca/ei_regions/eng/rates_cur.aspx
REAL ESTATE ACTIVITY BY REGION
• Units sold: 29.7% decrease from March, 2017
• Active listings: 10.5% increase from March, 2017
• New listings: 6.6% decrease from March, 2017
• Benchmark price: $1,608,500 (0.5% decrease over last 6 months)*
• Units sold: 25.9% decrease from March, 2017
• Active listings: 13.5% increase from March, 2017
• Benchmark price: $859,400 (9.4% increase from March, 2017)*
• Units sold: 22.5% decrease from March, 2017
• Active listings: 19.8% decrease from March, 2017
• New listings: 16.4% decrease from March, 2017
• Average residential price: $384,069 (7.7% increase from March, 2017)
• Units sold: 24.8% decrease from March, 2017
• Active listings: 0.2% decrease from March, 2017
• New listings: 6.7% decrease from March, 2017
• Benchmark price: $1,001,400 (15.2% increase from March, 2017)*
• Units sold: 30.3% decrease from March, 2017
• Active listings: 8.1% increase from March, 2017
• New listings: 2.4% decrease from March, 2017
• Average residential price: $571,648 (13.2% increase from March, 2017)
*Benchmark based on the MLS HPI® benchmark for single family detached homes.