If you’re looking for detached real estate in Greater Vancouver, you can expect to find a lot more inventory. Real Estate Board of Greater Vancouver (REBGV) numbers show detached listings reached a multi-year high for January. The inventory increase accompanied a multi-year low for sales, dropping prices to a 33 month low.
Greater Vancouver Detached Prices Fall To Multi-Year Low
The price of a typical detached home is falling across Greater Vancouver. REBGV reported a benchmark of $1,543,400 in January, down $25,600 or 1.7% from the month before. This represents a decline of 9.1% when compared to the same month last year. Inside of the city, Vancouver East fell to $1,428,700, 8.6% lower than last year. Vancouver West prices fell to $3,049,700, down 14.1% from last year. The REBGV detached benchmark has rolled back to the lowest level since April 2016.
Greater Vancouver Detached Benchmark Price
The price of a typical detached home across the Greater Vancouver Real Estate Board, in Canadian dollars.
Source: REBGV, Better Dwelling.
Looking at the direction of this trend, it looks like the annual price gain can get worse. The 9.1% decline observed in January is the 11th month we’ve seen the number go lower. It’s also the largest negative number we’ve seen since June 2009.
Greater Vancouver Detached Benchmark Percent Change
The 12 month percent change of a typical detached home across the Greater Vancouver Real Estate Board.
Source: REBGV, Better Dwelling.
Greater Vancouver Detached Sales Were The Worst Since 2009
Detached real estate sales have fallen to a multi-year low across the board. REBGV reported 339 sales in January, a 2.3% decline from the month before. This represents a 30.4% decline compared to last year. The monthly decline is typical for this time of year, but the annual decline is another story. This is the fewest detached sales for a January since 2009. Recession level sales in a non-recessionary environment should be a concern.
Greater Vancouver Detached Sales Vs. New Listings
The total number of detached sales, compared to the number of new detached listings per month.
Source: REBGV, Better Dwelling.
Greater Vancouver Detached Real Estate Listings Hit 5 Year High
New listings for detached real estate popped higher in Greater Vancouver. REBGV reported 1,843 new listings in January, an increase of 243% from the month before. This represents a 10.55% increase compared to one year before. A month-over-month increase is seasonal, but this was nearly twice as much as last year.
More listings and fewer sales left inventory levels at a multi-year high. There were 4,974 active listings for detached homes in January, up 1.48% from the month before. This represents an increase of 4.12% compared to the same month last year. Active listings are the highest observed since January 2014.
The shift in detached demand could lead to an even further decline in prices. The sales to active listings ratio (SALR) fell to 6.8, a 33% decline from last year. When the SALR is above 20, the market is a seller’s market, and higher prices are expected. When it falls below 12, the market is a buyer’s market, and lower price are expected. Between 12 and 20 is when the market is considered balanced, and prices are just right. Currently we’re in a buyer’s market, and the SALR is the lowest for a January since 2009.
More inventory, fewer sales, and the lowest prices we’ve seen in over two years. Good luck trying to spin this report as a positive, unless you’re a buyer. Even then, it’s going to be tough to pull the trigger unless some of these metrics firm up.
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I wouldn’t bet on that…RE will flex their muscle and pull all the strings they have, put pressure on the owned politicians and banks to revive this market….fintrac will again look somewhere else when funny money will pump again into this market…the narrative will never change for hongcouver…it will only go up, or so I heard for the last 15 years when I moved here…however, I still can’t believe what I’m seeing in the market, someone, please punch me in the balls with some steeltoes…I need to wake up I guess.
Meanwhile we’re trying to find a janitor position for the small company where i work on North Shore for 6 months which we can’t unless we have to pay them like a medical dr (and we pay fairly well + benefits) since nobody can afford to live on North shore anymore…
Friends,
This is the start. Do not trying to catch a falling knife.
Expect huge price correction due to below reasons.
A). Chinese love is over.
B). Despite fall in price. Prices are still overvalued.
C). Italy is in recession and France and Germany will be soon in the grip, UK is occupied within Brexit.
D) 2021 or 2022 recession is expected to hit our southern brother.
E). No true picture were interest will move.
Why use the cartels benchmark price?
Could someone tell me what the Average/Medium prices are for the area, detached?
GUYS GUYS I just had a scary thought. What if all this is happening not because of the Chinese, but because actual people who live in Vancouver, some of whom are NOT Chinese, and these people have overextended themselves by making questionable life decisions like never saving for retirement and borrowing hundreds of thousands of dollars from mom and dad, and also using sketchy financial instruments such as private lenders to the point where they are critically overextended and teetering on financial ruin, all because of the idea that real estate is not a home but a can’t-lose financial investment? Do any of you think that is possible?? God, I hope not!
Yes, a large number were domestic buyers but you might underestimate the power of FOMO that was occurring. The fear was and still is a group of people who have different standards of how they make money will buy a large part of the homes available. People in Vancity have this really allergic reaction to the idea of living somewhere else. Banks were giving out loans with the no existent underwriting standards and people don’t do well making good financial chooses when they are offered the choice.
Albert,
every burst bubble gets blamed on immigrants and/or foreigners. While they may play a relatively small role, it is generally shown that the greed, carelessness, and gullibility of the domestic participants is the key factor.
Didn’t you notice the reports over the past couple years of people, who can’t even figure out their change at Tim Horton’s, becoming landlords and real estate flippers? Maybe you know one. In stock market bubbles we call them “Joe/Jane Plumbers”, although completely unfair to most plumbers.
So, yes it is scary because you are correct – people have over extended themselves and when not enough people can borrow any more the music stops. I’m old enough to have been in high-school during the late 1980’s. This is deja vu all over again.
Albert,
every burst bubble gets wrongly blamed on immigrants and/or foreigners. While they may play a relatively small role, it is generally shown that the greed, carelessness, and gullibility of the domestic participants is the key factor.
Didn’t you notice the reports over the past couple years of people, who can’t even figure out their change at Tim Horton’s, becoming landlords and real estate flippers? Maybe you know one. In stock market bubbles we call them “Joe/Jane Plumbers”, although completely unfair to most plumbers.
So, yes, it is scary because you are correct – people have over extended themselves and when not enough people can borrow any more, the music stops. I’m old enough to have been in high-school during the late 1980’s. This is deja vu all over again.
Although I bet they are capable of recognizing dripping sarcasm.
Nobody is blaming the bursting bubble on foreigner or immigrants.
Did they not teach reading comprehension at your high school? Which you attended in the late 80s, and yet are now old and wise, meaning you graduated when you were
what, in your 40s? Actually, that would explain things.
Hey Vnm,
It was an honest mistake. Comprehend this:
COMMENT POLICY:
We encourage you to have a civil discussion. Note that reads “civil,” which means don’t act like jerks to each other. Still unclear? No name-calling, racism, or hate speech. Seriously, you’re adults – act like it.
Yeah, I actually know. I’ll try to make my next post even more sarcastic.
Sorry, sometimes it’s hard to tell on comment boards. However, more sarcastic would be great, though!
Time to reconnect house prices to incomes. Let’s see if we can beat 1982 affordability.
That might be a reach in Toronto. You could buy a cute rowhouse on Baldwin St. (near Dundas and University) for $17,000 back then.
Although corrections generally overshoot, esp. in many central neighbourhoods of the city where they fell by fully half in the 90s meltdown.
And that doesn’t include renovations.
Vnm,
There’s a difference between price and affordability. Affordability takes many factors into account. Price is just price.
Great article! I noticed the same points in the latest REBGV report. TREB’s story is exactly the same, just one chapter behind.
I look mostly at actual selling prices which have showed this trend for a very long time now. The reason it’s just now being picked up by the mainstream (or will be soon) is because of Comparative Delusion which I explained in great detail in 2009 over here https://thebakersson.wordpress.com/2009/04/24/dow-jones-to-hit-52-week-high-by-november/
By constantly comparing to the year ago period, one completely ignores the distance traveled from the peak (or the bottom, ‘cuz it works the same on the way up too). One who is aware of this can identify the trend before many others do.
I think the real test to Vancouver’s RE market is in the next two years when the tens of thousands presale condo’s start to complete. A large number of the buyers especially speculators won’t qualify for mortgage and they will be forced to sell at a steep discount.
Great article! I noticed the same points in the latest REBGV report. TREB’s story is exactly the same, just one chapter behind.
I look mostly at actual selling prices which have showed this trend for a very long time now. The reason it’s just now being picked up by the mainstream is because of Comparative Delusion which I explained in great detail in 2009 on my short-lived blog.
By constantly comparing to the year ago period one completely ignores the distance traveled from the peak (or the bottom ‘cuz it works on the way up too). One who is aware of this can identify the trend before many others do.
Hey M.Bury,
Any chance you have a copy of that explanation you wrote online still? I’d love to read this more in-depth.
Thanks.
Joseph,
The link is in my post above Asefa Belete’s or click on my name.
I think we are only seeing the tip of the iceberg. In Vancouver real estate is directly responsible for over 25% of our local GDP and indirectly some estimate as high as 40%. What people have to understand is that as realtors can’t make any sales, construction workers get laid off, retail sales go down, etc. the impact will be massive. Listings will explode as people lose their jobs, can’t make mortgage payments and have to move to find work. It will be a self reinforcing cycle. I won’t be surprised to see a 70% drop in prices as we finally realize that Vancouver has no industries or jobs beyond real estate. It will be extremely ugly.
I hope this time it’s actually true. People have been saying the bubble will burst for over 10 years now. I’ve been sitting on the sidelines all this time with cash on hand! FML!
I’ve seen corrections of 10-15% for detached but that’s not a lot considering the 120% gain over the years.
I need a big 40% correction so I can finally move out of this room I’m renting! Yes I’ve been paying $500 a month renting for the past 6 years and believe it or not I have over $1.5 million in liquid assets but can’t pull the trigger due to these crazy market swings.
No one’s been saying it’s been happening for 10 years, that’s just what real estate agents say to pump it always goes up narratives. Home prices rarely go down while interest rates are falling, which has been happening since 1996.
A correction = 10 – 20%, a crash = 20% or more in 12 months. The declines you’re seeing are when the economy is good. When China and US enter their recessions in 2020, you think Canada is going to be able to just add more debt to households to avoid it? lol
Hang on to your cash for as long as you can.
Would the real m burry please stand up?
But like seriously Dr. Bury are you out there?