Vancouver

Vancouver Detached Real Estate Sales Fall To Multi-Decade Low, Losses Get Bigger

Greater Vancouver’s detached real estate market slipped a little lower last month. Real Estate Board of Greater Vancouver (REBGV) numbers show prices dropped in June. Prices for the market dropped as inventory made a small decline, and sales had the worst June in almost 30 years.

Greater Vancouver Detached Real Estate Prices Are Down Over 10%

Greater Vancouver detached real estate prices are falling, according to the benchmark price. REBGV reported a typical detached home hit $1,423,500 in June, down 10.9% from last year. In the City, Vancouver East prices fell to $1,350,100, down 12.1% from last year. In Vancouver West, the benchmark fell to $2,912,000, down 14% from last year. That last one is down a whopping $15,600 from just the month before.

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.

The 12 month change in the benchmark price is improving, but the losses from peak increased. The 12 month decline of 10.9% in June is the first month-over-month improvement since February 2018. From the peak, prices are down 11.9% – about $188,400. The decline from the peak is actually getting larger than it was last month.

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.

The average sale price of detached home is also tumbling lower – a lot lower. REBGV reported an average sale price of $1,486,620 in June, down 15.28% from last year. The average price isn’t adjusted for size or quality like the benchmark, so it’s not great for insights on what to pay. It does give us a little intel about the dollar flow, which appears to be heading lower.

Slowest Month For Detached Sales Since At Least 1991

Detached real estate sales in the region made a minor decline, but it was enough to set a new record. REBGV reported 763 detached sales in June, down 15.78% from the month before. This represents a decline of 0.39% compared to the same month last year. The less than one point decline means it was fewest June sales since at least 1991. We’re only stopping at 1991 because that’s the last year REBGV has readily available. There’s a good chance we might have to go a little further back to find another June this slow.

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 Inventory Is Firming Up

The number of new listings for detached real estate is on the decline. REBGV reported 1,735 new listings in June, down 21.06% from the month before. This represents a 17.92% decline compared to the same month last year. The monthly drop is normal, the annual drop a little more significant. Fewer new listings weren’t enough to make a significant dent in total inventory.

The number of detached listings for sale made a slight decline last month. REBGV reported 6,518 active listings in June, down 0.56% from last year. Other than last year, the last June to read this high was in 2014. It’s not a significant drop, but it does show the balance of inventory is starting to get closer to “normal.”

Sales dropped faster than inventory, which made the sales to active listings ratio (SALR) drop further. The SALR for detached homes fell to 11.4% in June, down 2.5% from last year. Using this measure, the market is a seller’s market when the ratio is above 20% – when prices are expected to climb. The market is a buyer’s market when the ratio falls below 12% – when prices are expected to fall. The market is balanced when the ratio is between 12% and 20% – and the prices are just right.

Greater Vancouver’s detached market is still in a rough state. Prices are falling, sales are at multi-year lows, but inventory is finally firming up. The good thing with sales at this level is they can’t get much lower… right?

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10 Comments

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  • Reply
    Tatiana 2 months ago

    You know there’s trouble when even the board’s funny stats are starting to deteriorate. You’re right though, it can’t get any worse at this point. In my opinion, sales are poised for a bounce, prices might rise a little, before resuming another leg lower after a macro-market trend.

  • Reply
    Mac 2 months ago

    Still not far enough. Vancouver has one of the lowest income levels of any major city in the country. Try pushing these prices in Montreal or Calgary. People would just leave.

  • Reply
    Joseph 2 months ago

    Just an FYI, it looks like the city of Ottawa is showing signs of catering to foreign investors. Just as was rampant in Vancouver real estate pricing to attract foreigner investors, I found this house for sale in Ottawa, added within the last 2 days:

    https://www.realtor.ca/real-estate/20879429/4-0-bedroom-single-family-house-27-crystal-beach-drive-ottawa-crystal-beach

    $558,888. I hadn’t seen this in Ottawa up until today. Whether or not you believe the number 8 works in selling homes, the bottom line is that the real estate agent believes it’s the case and wants to cater to the foreign market.

    Also makes me wonder if the local Ottawa market is tapped out due to the increases over the last 2 years and now the Agent has to go to foreign investors.

    BTW, for those wondering about the house price decked out in 8s, here’s the theory behind using it:

    “No. 8 has long been regarded as the luckiest number in Chinese culture. With pronunciation of ‘Ba’ in Chinese, no. 8 sounds similar to the word ‘Fa’, which means to make a fortune. It contains meanings of prosperity, success and high social status too, so all business men favor it very much.”

    • Reply
      Sam Liu 2 months ago

      lol. Those aren’t the same foreign buyers. The issue is they can’t get their money out, and Canadian banks have been asked to start verifying foreign incomes. From Tokyo to Vancouver Chinese money has dried up, and the PBOC has been injecting liquidity to keep banks from flopping.

      Not sure what the situation is with this exact listing, but they might just be hoping for a Chinese buyer. Realtors will market to foreign buyers, because it’ll drive local FOMO though, so be careful with that. You don’t want to be the idiot that bought a detached because you thought foreign “investors” were buying real estate, only to find out it was a class of people that didn’t care if they lost money.

      https://www.cbc.ca/news/canada/british-columbia/former-mac-marketing-manager-disciplined-over-fake-chinese-buyers-1.2691528

    • Reply
      Rammer 2 months ago

      Waaaaaaayyyyyyyy too overpriced for that area and for what the house is. lol… But the Ottawa market is catering to investors of all types… specifically those migrating from Toronto as it is/was the affordable market until recently. When I bought outside of Perth most houses were being bought by expats from Toronto both for themselves and for investing. Now it probably is all types of investors as I see many faces within Ottawa and the countryside looking to fix them up then pop them out.

  • Reply
    Craig 2 months ago

    The problem with Vancouver is that family income averages $72,000. / year. Middle Class people paying Upper Class prices for Middle Class homes. Family Incomes are higher in every major city between here and Montreal. The average Family Income in Saskatoon is $90,000./ Year.

  • Reply
    s2u 2 months ago

    You know it’s bad when “high end property” based realtors are getting crushed, and local 1% fee realtors are busier than ever….

    Local residents getting honey potted into buying “deals” are going to be pretty upset once they realize big money buyers aren’t going to be around for the foreseeable future… and the bottom’s a long way to go.

    I’m seeing Vancouver condo’s, townhouses, and single family dwellings selling for below 2016 prices.

    Abandon ship!

  • Reply
    Chester Pape 2 months ago

    Is Vancouver like Toronto where only 45% earn over $30,000 yearly, 50% earn below 30k yearly and only the top 5% earn over 100k?

  • Reply
    Ima Faque 2 months ago

    Well part of the reason prices are falling is finally our police are dealing with a very few trouble makers, and if not the police “natural consequences”. For example the story of Richard Yen Fat Chiu detailed here: https://cme4pif-thoughts.blogspot.com/2019/07/death-of-fruit-importer.html

    Fascinating story.

  • Reply
    Dan Tan 2 months ago

    Using sales volumes as far back as 3 decades, perhaps a better but less conventional metric would be a population adjusted or per capital figure. That will really show the decline.

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