Concerns over the Vancouver real estate market had a minimal impact on condo buyers. Despite plummeting demand and building inventory, condos were barely touched according to the latest release from Real Estate Board of Greater Vancouver (REBGV). Buyers continued to display above average demand, although they were slightly more modest than the month before.
Prices continued to move up for the 22nd month in a row, reaching a benchmark price of $515,300. While it’s less than a 1% increase from the month prior, it’s a 26.9% increase from last year. The minor bump appears to be inline with August 2015 when prices increased by 1% from July 2015.
Inventory Is Only Slightly Higher Than Last Year
While inventory was building up in a few home types, there were only 1812 condo listings last month. This is an 11% decrease from the month prior, and a 3.7% decrease from August 2015. The reduction in inventory may continue to provide upward pressure on condo prices.
This information comes on the heels of Juwai, China’s largest foreign real estate firm, who recently telling us they’re seeing an increased demand for properties under a million dollars. The spread between lower and higher priced properties could be closing in the near future – which may be another hit to affordability in the city.
Absorption of sales-to-active listings continued down, but still remained exceptionally high. In August, the rate of condo absorption was 74%, only one percent lower than August 2015. In contrast, the absorption of all home types was 29.3%.
Real estate analysts believe that prices see upward pressure when absorption is above 20%, and lower prices when it’s below 10%. Vancouver’s peak insanity was in March 2016, when it hit 65.3%. So to say condo demand is above normal, may be a bit of an understatement.
So is Vancouver real estate cooling down? The luxury market might be, but more affordable segments are seeing continued demand. It’ll be interesting to see if this leads to an affordability crunch as the gap between high-end and low-end get closer together.
Price data courtesy of REBGV.
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