Greater Vancouver real estate prices are soaring as inventory hits the lowest level in decades. And why wouldn’t it? Selling would have been walking away from tens of thousands of dollars, shows Real Estate Board of Greater Vancouver (REBGV) data. In December, home prices accelerated to a new record, with the highest growth rate in years. Now there’s excess demand, while inventory has fallen to a 30-year low.
Vancouver Real Estate Prices Increased $20k Just Last Month
Greater Vancouver real estate prices surged to a new record high. The composite benchmark price of a home reached $1,230,200 in December, up 1.6% ($19,373) from the previous month. A typical home is now 17.3% ($181,436) higher than last year. If it’s not totally clear, that’s an astronomical amount of growth.
Greater Vancouver Composite Benchmark Price
The price of a typical home across Greater Vancouver, in Canadian dollars.
Source: REBGV; Better Dwelling.
Home prices are growing at one of the fastest rates in years. December saw annual growth reach the highest level since 2016. Back then, the region was also making national news for surging home prices. Now the rate is approaching the record, but no one has noticed since the whole country is moving at this rate.
Greater Vancouver Composite Benchmark Price Change
The annual percent change of a typical home across Greater Vancouver.
Source: REBGV; Better Dwelling.
Medium-term growth has been a little less generous, with the previous data dragging. REBGV estimates a typical home has increased 20.1% from three years ago, just 3 points over annual growth. The past year produced 86.1% of growth over the past three years.
Vancouver Home Sales Are Falling, But 33% Higher Than Usual
Greater Vancouver home sales are falling but still remain historically high. There were 2,688 home sales in December, down 21.6% from the month before. This is also 13.1% lower than last year, and 33.4% higher than the 10-year average. Low rates are fueling more demand than home sales can handle.
Vancouver Real Estate Inventory Hits A 30-Year Low
Falling sales are most likely due to falling inventory at the lowest level in decades. There were just 5,236 active listings for homes in December, down 26.7% from a month before. It’s also 38.7% lower than the same month last year, with REBGV reporting this is a 30-year low. A 30 year low for inventory naturally drives prices higher with above normal home sales.
Greater Vancouver Composite Sales Vs. Listings
The number of homes sold vs total inventory in Greater Vancouver.
Source: REBGV; Better Dwelling.
There are a couple trends converging here, including elevated demand and low inventory. The Bank of Canada (BoC) uses low rates to boost demand for large goods like homes. At the same time, they’re pretending it has nothing to do with them. The Governor might act surprised when asked, but it was also one of the goals they expressed.
Vancouver real estate inventory is low, even before people consider elevated demand. But if you look at the annual growth and active listings chart, you can see the inverse relationship. High home price growth occurs during low inventory levels.
On the one hand, this is supply and demand — more homes mean less urgency (and price growth). On the other, fast-rising home prices often leave investors in property for a long time. Why list for sale if you’re gaining almost $20k per month? It’s nearly a year’s worth of rent collected every month an investor hangs on.
