Vancouver

Vancouver Condo Prices Rise At The Fourth Fastest Pace In History

Lower condo sales and higher inventory should relieve some of the pricing pressure in Vancouver, right? Not according to numbers published by the Real Estate Board of Greater Vancouver.

Vancouver Condo Prices Rise At The Fourth Fastest Pace In History

Vancouver condo buyers may have gone a little overboard last month. Greater Vancouver Real Estate Board (REBGV) numbers show that prices made a huge leap in February. According to the board, prices climbed at one of the fastest rates in the history of the city. All while sales dropped, and inventory climbed.

Vancouver Condo Prices Are Rising At The Same Pace As Before A Foreign Buyers Tax

The benchmark condo price, a.k.a. the price of a typical condo, reached a new all-time high across Greater Vancouver. The benchmark is currently $682,800, a 2.61% increase from January. This represents a 27.22% increase from the year before. If that sounds like an absurd price increase, that’s because it is.

Source: REBGV. Better Dwelling.

Let’s spend a moment unpacking those numbers. The monthly increase of 2.61%, works out to $621 per day. Think about what that would mean if this was a normal, meh – everyday occurance. The same buyer of a typical condo this year, would have to make over $226,000 more in net income, to buy the same condo than someone last year. The annual gain of 27.22%, is also pretty close to the rate of growth before Vancouver had any foreign buyer taxes. Either Vancouver’s buyers are broken, or the benchmark calculations are. Take your pick.

Source: REBGV. Better Dwelling.

Median Price Increase Are Much More Conservative

For those skeptical of the benchmark, let’s take a look at Vancouver’s median sale price. For those trying to remember what a median is, its the midpoint between a set of numbers. This means half of condos sold above this price point, and half sold below this point. The median is the most commonly used method of measuring price movements internationally. Even in Vancouver, most Mainland Chinese sites use the median instead of the benchmark.

The median condo price is showing much more conservative changes. Vancouver West, the largest region for condo apartment sales, had a median price of $873,000. This represents a decline of 0.79%, when compared to the same month last year. Vancouver East had a median sale price of $632,222. This represents a 2.06% increase from the year before. Not quite the insanity the benchmark is showing.

Vancouver Condo Sales Drop Over 7%

Condo sales across Vancouver are dropping, although not nearly as fast as cities like Toronto. REBGV reported 1,185 sales in February, a 17.1% increase from the month before. Compared to the same month last year, this represents a 7.05% decline. The month-over-month climb is seasonally expected, the annual decline is not. You can’t really make any conclusions from sales, without looking at a change in inventory. So, let’s look at that.

Source: REBGV. Better Dwelling.

Vancouver Condo Listings Rise Over 7%

Vancouver condo listings are on the rise. REBGV reported 1,744 condo listings, a monthly increase of 16%. Compared to the same month last year, this is a 7.98% increase. Once again, the monthly increase is seasonal. The annual change, not so much.

You would think an increase of inventory, and a decline in sales would remove some of the price pressure? Apparently, that’s not the case. Prices are rising at the same pace as before Vancouver was even measuring foreign buyers. Now, after foreign buying numbers have declined significantly, prices are still at the same pace of growth according to the industry. You know your market shit the bed when even the CEO of China’s largest overseas real estate firm starts calling your city “overpriced.

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Photo: Magnus Larsson.

16 Comments

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  • Reply
    Mac 9 months ago

    These aren’t foreign buyers, these are idiots that think this is their last chance to own a home. They’re getting mom and dad to take out a HELOC from private lenders, to finance the downpayment. We live in a country where we don’t ask where $100,000 deposit comes from. What do you expect?

  • Reply
    People's Republic of Vancouver 9 months ago

    Clark’s downpayment program at work. Won’t see a big change in the numbers until that’s eliminated at the end of March, and the mortgage pre-approvals prior to B-20 expire. Winter is coming, and these idiots are going to be sorry they leveraged themselves to the teats.

  • Reply
    george 9 months ago

    Early last month I went to a new development that opened immediately after a pre-sale in North Vancouver. When I inquired about what is available, I was told that 95% was sold already which was less than a week….2 bdrm shoe-boxes which were sold close to 1 million…who can really afford these??? After a week I found from a coworker that her realtor purchased 6 of these at the pre-sale in that building obviously for flipping…And maybe 10 more other like him did the same. How is this possible to still make money? Aren’t realtors aware of what is happening with the market? We’ll wait and see…

  • Reply
    Harvey 9 months ago

    Thank you for another great article on Vancouver. Love your articles, even the Toronto ones, but always nice to see more about Vancouver where I live. When you get a chance, if you haven’t done an article already, I would love to see a story of the number of condos in the pipeline being built compare to projected demand. I think you did a story like that on Toronto once. Anyway, keep up the good work. The best about reading your stuff is that it’s like watching a trainwreck in slow motion. I get to see the Vancouver housing market heading for the crash before it hits.

  • Reply
    T. Shovel 9 months ago

    Today’s buyers are a mix of local speculators, foreign speculators, and FOMO (fear of missing out) buyers. Presales are still being heavily promoted in Hong Kong and in Chinese language media in Vancouver, so expect some of the local speculators are using foreign money. All in all, this is probably not a good time to buy with a big mortgage. You could easily end up under water.

  • Reply
    Matt 9 months ago

    Add Vancouver condos to the list of Crypto currencies. The intrinsic value on the appreciated value of these things (price increases in last 2 years) is absolutely 0, just like Bitcoin.

  • Reply
    Bob 9 months ago

    “these are idiots”

    “Winter is coming, and these idiots are going to be sorry they leveraged themselves to the teats.”

    “The best about reading your stuff is that it’s like watching a trainwreck in slow motion. I get to see the Vancouver housing market heading for the crash before it hits.”

    “All in all, this is probably not a good time to buy with a big mortgage. ”

    “Add Vancouver condos to the list of Crypto currencies. ”

    Yet prices persist in their climb. 2% a month like clockwork. A downtown house that sold for $2,700,000 2 years ago just listed for $6,500,000. A house down the street from me that sold in early 2016 for $5,300,000 was renovated and lists for $11,000,000 today.

    This big crash everyone keeps talking about would need to be on the order of 70% to have an impact on local price/salaries.

    • Reply
      Roger Troutman 9 months ago

      Bob, people said the exact same thing when I bought my first condo 20 years ago. People thought I was crazy spending 200k for a downtown Vancouver ‘leaky’ condo! “Overvalued, overpriced, you’ll be underwater with levies and repairs” was the language of the day.

      The fact is, the Chicken Littles will always be there to tell you how bad a time it is to buy. I’m not saying it’s a good time by any means, but there are those who will always think it’s the worst time in history simply because we are designed to be skeptical/paranoid.

      • Reply
        backwardsevolution 9 months ago

        Roger Troutman – buying a condo 20 years ago (1998) is a lot different than buying a condo now. Prices were very depressed at that time, so of course that was a good time to buy.

        There will always be Chicken Littles? Yes, there will be. Just as there will always be Turkey Stupids who buy at the top.

        • Reply
          Roger Troutman 9 months ago

          Actually the popular opinion was not that prices were depressed at all. It was that Vancouver real estate was ridiculously overvalued. Of course you can say it was a good time to buy in retrospect, but that wasn’t what folks were saying at the time. Those are the same folks who can’t fathom how any local can afford real estate in Vancouver (btw – my last 4 new neighbors are all local and non-asian).

          The same occurred in the lead up to 2008, then 2012-2014, all times when everyone was calling a crash and in all honesty there very well could have been. Prices peaked, declined a bit with some stabilization.

          Yes this time *feels* different. But I know a lot of people who are buying in todays market to escape the ridiculously high rents in this city and are happily living in their new purchases.

          I would also bet that those people will be just fine in the long run.

          • backwardsevolution 9 months ago

            Roger Troutman – nice rewrite of history, but I remember that time. My neighbors from Hong Kong could NOT give their house away, and it was on one of the most elite streets in the area. They actually didn’t care what they got as they were quite well off and just wanted to go back to Hong Kong (which they did), and even then there were no takers. Believe me, it was not overvalued by any stretch of the imagination, well back at 1987 prices.

            You are a realtor selling his book.

      • Reply
        Raging Ranter 9 months ago

        Buying at the bottom of the market always makes one feel like a genius. People who bought stocks in 2009 feel like geniuses today too. Will they still feel like geniuses in 5 years? Will you?

    • Reply
      What about Bob? 9 months ago

      Benchmark Condo condo prices up.. blah blah blah. This is old news and everyone knows what’s driving it.

      Hey BD.. how about reporting the absolute free fall that is the single family detached home market in Vancouver and surrounding communities? This downward spiral has been happening since our FBT and especially since China turned off the taps to RMB leaving the PRC for property acquisition. Quite easy to trace even using Stats offered by the real estate board.

      In the higher prices segments, i’ve heard of several stories over the past couple of months of properties selling well under list – like 20-30% under ask for single fam homes, which equates to $1m+ below ask in alot of cases. General consensus is that the high priced areas like west van are down at least 25%, but likely more since sales have been so scarce. Tough to gauge a market that has evaporated.

      Looking at the detailed sales stats, these stories are probably true unlike Bob’s random stories about some house downtown and his magic house down the block that doubled in value during the exact timeframe of the beginings of the downward spiral. Either Bob is talking about redevelopment plays or he is lying. By the way, the are fewer houses in downtown than there letter in your name Bob so I’ll wager you’re bending the truth a little.

  • Reply
    SAL 9 months ago

    In my humble opinion yes we understood Vancouver and Toronto too much money came from outside Canada and inflated the Market. Nowdays the money from the top is coming down because the downsize but also the domestic speculators are investing in Condos and Townhouse. Now we have the stress test which is going to stop the first buyers mainly the young generation. I do think is unfair the youngest should pay the mistake for the greed of others but I do not think is going to resolve the problem as well. I think could be better a simple and effective change for example if you buy a property and sold before 5 years will be taxable 50% not on the capital gain but the whole asset value. For sure it does not stop the downsize but who speculate in the condo for resale in 6 months is not going to buy anymore. I think we are facing the problem once more with general rules and not thinking the segment of the real estate market and most of these rules made problem to the poorest and the youngest which pay the price of mistakes and greed done from others.

    • Reply
      Bob 9 months ago

      ” I think could be better a simple and effective change for example if you buy a property and sold before 5 years will be taxable 50% not on the capital gain but the whole asset value. ”

      Yes! Full marginal tax rate (no capital gain 50% reduction) applying to the house value gain is a good tool that our governments should be using to curb speculation. It should apply to all offshore buyers at all times. It should also apply to all short-term flippers. Why on earth have we been giving the planet’s most favorable real estate tax treatment to offshore speculators?????? With the relatively recent influx of large-scale offshore money, a sleepy little tax tool that Canadians enjoyed for generations to build their nest egg has been weaponized against future generations.

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