Vancouver detached real estate just printed some of the worst sales numbers ever, but that didn’t stop prices. Real Estate Board of Greater Vancouver (REBGV) March numbers show prices climbed close to the all-time high. The price increase occurred, despite sales dropping much faster than inventory levels.
Vancouver Detached Prices Are Less Than A Point From High
The benchmark price of a detached home is still climbing in Greater Vancouver. The benchmark reached $1,608,500, a 0.4% increase compared to the month before. This represents a 7.4% increase compared to the same time last year. This brings the detached benchmark within 0.5% of the all-time high, achieved in September 2017.
Better Dwelling. Source: REBGV.
Worth noting what’s happening with the annual detached increase in Greater Vancouver. This is the first time we’ve seen annual growth taper from February to March, since 2013. During 2013, prices were in negative territory. That shouldn’t bother longer term holders, since prices are up over 102.1% compared to 10 years ago. However, short term speculators should probably take note.
Better Dwelling. Source: REBGV.
City of Vancouver Sees Worse Price Growth
In the City of Vancouver itself, prices aren’t up as much – although they’re not down that much either. The detached benchmark in Vancouver East is now $1,553,100, down 0.5% from the month before. This brings prices to 6.9% higher than the same time last year. In Vancouver West, the detached benchmark reached $3,449,000, a 1.5% decline from the month before. This represents a 0.4% decline from the same month last year. Vancouver West is the only REBGV region where the detached benchmark is negative compared to a year before.
Vancouver Detached Sales Are Down 37%
Detached sales are down substantially compared to previous years. REBGV reported 717 sales, a fairly normal seasonal increase of 15.6% from February. However, this also represents a decline of 37.73% compared to the same time last year. The decline in detached sales is particularly interesting in the City of Vancouver.
Better Dwelling. Source: REBGV.
The City of Vancouver had the worst first quarter for detached sales for at least 27 years. Vancouver Realtor Steve Saretsky sent us a tip, noting there were only 717 detached sales in the first quarter of 2018. This is a 37% decline compared to last year, and the worst quarter in over 27 years of data available from the REBGV. Saretsky also noted he believes “it shows demand has dried up in that segment particularly with offshore investment.”
Better Dwelling. Source: REBGV.
Vancouver Detached Listings Are Down Over 6%
The number of detached listings are falling across Greater Vancouver. REBGV reported 1,800 detached listings in March, a 0.3% decline compared to the month before. This represents a 6.44% decline compared to the same time last year. Despite the decline in listings, the decline in sales was substantially larger. However, that appeared to have a minimal impact on prices.
Detached prices are climbing towards their all-time high, despite sales dropping significantly faster than inventory. Normally real estate prices are slow to fall as sales decline, but they usually don’t rise when sales are falling faster than inventory.
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Won’t get a fix until we ban foreign buyers from owning real estate, and stop people from owning seconds homes. The speculator tax needs to be doubled or tripled.
Detached homes in Vancouver are a luxury, and as long as Vancouver keeps getting immigration, prices will continue to rise. The reason? People can buy them and hold out for up zoning. If you own multiple homes as an assembly, you’ve very well positioned to benefit from potential up zoning.
That is only true if immigration brings new money, otherwise immigrants are in the same boat as locals. So only the number of wealthy immigrants matters.
Why use the benchmark Frankenumbers? Why not use actual median prices- much more honest, unbiased, and reliable.
If the benchmark is down, the medians must be waay down…
Lower sales volumes will result in lower prices – especially if today’s survey showing half of all Canadians are worried about being able to pay their bills…
Medians are up quite a bit in most REBGV regions.
There’s no perfect way to measure the direction of home prices. The benchmark is a weighted index that is from CREA’s black box. Median prices don’t adjust for size/lots, and consequently may not reflect luxury or budget heavy markets.
It’s better to watch all metrics to get an idea of the full picture.
Here are the missing parts for you (city of Vancouver only):
Median price: current $910k (YoY change -1.5%)
Average price: current $1.27M (YoY change – 9.5%)
Months of inventory: 5.75 (YoY increase +221%)
And this is for all properties combined including booming condos.
Average price decrease compared to median price is clearly showing that Big Money are leaving the market and the most expensive properties are loosing most of the value.
Active inventory is huge.
Check yourself: https://www.zolo.ca/vancouver-real-estate/trends
Sorry, my mistake, for months of inventory correct reading is 5.75 (YoY increase +121%).
It’s still huge increase but not that scary as 221%.
There has been no evidence on the ground of any meaningful price drops. Offshore ownership levels are extremely high after 16 years of relentless buying. I suspect it would take some of those owners to start selling before you would see a price drop in Vancouver. I have no idea what might trigger offshore owners to sell.
I was wondering the same thing. Maybe when the bare trust loopholes get closed and the speculation tax gets implemented.
Bob – “I have no idea what might trigger offshore owners to sell.” When they start seeing others losing money, they’ll sell.
I’ve created a market report on my blog that shows some interesting insights on the Westside Detached market. I look at both the raw data, the medians and the benchmark and pull out the key story into an infographic type format.
https://mactownhomes.com/blog/
The Westside detached market came to a brief standstill after the Feb 20 NDP budget announcement. It was pretty quiet out there for a couple of weeks. There was a lot of uncertainty while people figured out what the impact on buyers and sellers would be.
I am actively working in that market right now, and we see buyers coming back into the market hunting deals again. What goes up, must come down:)
Are you really going to spam your realtor report on another market report? Seems like bad taste. Surprised they even published that comment.
Yes that could be a surprise to lot of people . However the Chinese Government are clamping down on Chinese national funneling money overseas . Expect this trend to continue. Not to mention China is devaluing its currency. Trade war will put lot of pressure on future overseas investment going either way for both parties. I expect Vancouver real estate to be affected more so on this. Of course that does not take in account about interest rate/inflation and all the stress test measures that went into effect in January. The fact that prices are up are due to all those real estate agents want buyers to bid even there is no buyer. The whole real estate transaction in Canada are just a sham. Expect this to change soon when cheap money and oversea investors from China dry up
Another insider tip for you BD.. Have a look at the sales to active listing ratios at price levels above the benchmark price for detached ($1,608,500). Huge difference in demand and supply in that space. Once you dig just a little more beyond the surface, you will see that the vancouver real estate market is literally a dead man walking.
Insider, not only above the benchmark. Inventory is already above 5 months for all properties combined including booming condos (I provided link to stats above).
For those who don’t know what it means – for every buyer, you have 5 properties available on the market. You don’t need to have a degree in economics to understand that those buyers have a great chance to negotiate price down.
Anyone here from Vancouver? Could you please explain to us how you guys can afford buying anything there?
Median price on a condo is now $750k. I understand that you may not be able to afford houses but condos are the very basic property, there is nothing more basic than that.
You need to have $130k family income in order to qualify at the bank for $750k average condo with 20% down which is almost twice as much as the median household income.
Can anyone explain how people can afford that?
I thought the rules mentioned you pay 5% below 500k and 10% for the remaining of 250K ….
I live in Vancouver and have no idea how anyone can afford to buy…. I am trying to convince my wife to move and hopefully get out of here like those 10,000 who left last year.
Such negativity. We have all made a fortune off our houses. Houses will always go up due to inflation and immigrants flooding in. Good times for all.
Home prices have started to really rise especially in the cities around Toronto. Inner city house prices may have risen to the point where the average family cannot afford to purchase. Cities like Brantford, Barrie, Burlington, Guelph are booming, offer high employment and cheaper housing.
http://unionstationtoronto.com/housing-prices-in-toronto-area-cities/