Vancouver condo prices get another bump higher. Numbers from the Real Estate Board of Greater Vancouver (REBGV) show that prices climbed for another month, reaching another all time high. This climb in September was accompanied by more sales, and listings than the same time last year.
Prices Rise 21.7%… or 24.47%
The price of a condo rose for the tenth month in a row. The benchmark price is $635,800 for September, an increase of 1.4% from the month before. This represents a 21.7% increase from the same time last year. Although it’s actually 24.47% higher than the benchmark reported in September 2016. Oh yeah, you didn’t hear? Benchmark prices changed methodology. This makes the numbers you heard last year just a little off.
Benchmark Prices Get A Change In Methodology
In June, the Canadian Real Estate Association (CREA) made a quiet update to the methodology used in to calculate benchmark prices. Neighbourhoods with less than 12 sales in a year, have been eliminated from the calculations. Neighbourhoods with more than 20 sales in a year, have been added. CREA economists would probably argue that this increases the accuracy. After all, they’re eliminating outliers from their calculations. Real estate bears argue this places a disproportionate focus on higher volume neighbourhoods. The problem with that would be a high volume neighbourhood is called “hot” by most real estate agents.
Vancouver Price History Get Bumped Up To $12,500 Higher
Who cares, right? Well it impacts Vancouver’s historic numbers. From August 2016 to May 2017, a.k.a. post non-resident speculator tax, benchmark prices increased by over $10,000. To contrast, the same periods in Greater Toronto only see a hike of around $5,000. Best case scenario, last year’s growth was understated. Worst case, these numbers have an additional ~1% margin of error on top of the existing margin of error. Actually, there’s worse cases, but we’ll stick with that one. On that note…
Only the new methodology is used from June 2017, so there’s no difference. Source: REBGV, CREA, Better Dwelling.
Condo Listings Rise Over 11%
Condo inventory saw a rise in listings, by almost all measures. REBGV reported 2,179 condo listings in September, an increase of 22.28% from the month before . This also represents an 11.74% increase when compared to the same time last year. The August to September jump is seasonal, so don’t read too much into it. The annual increase is worth noting, and I’ll mention why a little later.
Condo Sales Rise Over 23%
Condo sales in Greater Vancouver are seeing growth compared to last year. REBGV reported 1,451 sales in September, a relatively seasonal decline of 10.04% from September. This also represents a 23.17% increase from the same time last year. This puts the rate of absorption at 67%, just under seven points higher than the same time last year.
Vancouver condo prices rose, anyway you sliced that stat. Listings saw a rise, but sales rose even faster – putting more more pressure on prices. Two things are worth keeping in mind here. The first is volumes typically taper as prices get higher, not increase. The increase implies very odd market mechanics. As prices climb, less people should be able to sell, since buyer gridlock normally sets in. Buyer gridlock is when the next type of home you would move up to, becomes too expensive to make the upgrade.
The second thing is the annual comparison is a little odd due to the introduction of the foreign buyer tax. September 2016 was the second month after it started, so a lot of people stood back to see what would happen. Even those not impacted directly by the tax. The irregular buying patterns make direct comparisons not all that useful.
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