Vancouver Real Estate Is Soaring… In Terms of Inventory

Vancouver Real Estate Is Soaring… In Terms of Inventory

Vancouver real estate is seeing inventory hit a high for the year. Numbers from the Real Estate Board of Greater Vancouver (REBGV) show that a decline in sales is causing listings to build at a rapid rate. Despite soaring inventory, prices still climbed more than the Vancouver median family income year-over-year.

Prices Increased 2.1%

The benchmark price of composite homes, your typical Vancouver home, made a pretty big move higher. The composite price is now $1,019,400, a 2.1% increase from the month before. This represents a 9.57% increase from the same month last year, which works out to $89,000. The market may be cooling, but if you’re the median family – your house still likely made more than you. This is the first time the composite price has hit over a million.

Source: REBGV.

Sales Decreased 23.97%

Sales are showing big declines, but the seasonal drop was smaller than the year before. July 2017 saw 2,960 sales, a 23.97% decline from the month before. This is 8.25% lower than the same month last year. The monthly drop seems huge, but there’s a seasonal drop this time of year in Vancouver. For a little context, the same period last year saw a 26.6% decrease.

Source: REBGV.

Listings Increased Over 7%

Listings are the big story, and REBGV would likely agree. There were 9,194 homes listed for sale at the end of July 2017, a 7.97% increase from the month before. This is 10.9% higher than the same month last year. Higher inventory isn’t a problem by itself, but when combined with declining sales – it theoretically should provide downward pressure on prices.

Jill Oudil, president of the REBGV, noted “Because home sale activity decreased to more historically normal levels in July, the selection of homes for sale in the region was able to edge above 9,000 for the first time this year.” Which is real estate executive for people aren’t buying homes as quick as people are selling them, so they’re piling up.

It appears that Vancouver is the land that math forgot. Increased inventory, and declining sales typically results in reduced pricing pressure – but prices still climbed. This bucking of traditional housing economics isn’t too surprising, considering the recently revealed history of Vancouver of real estate.

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  • Reply
    KoolAid 7 years ago

    “Vancouver is the land that math forgot” hit the nail on the head! Here’s a bit of math. YTD July 2017 single family home sales are down $7.69 billion vs. YTD 2016 in terms of cash in the gvrd. This year’s sales are down $7.71 billion across all dwelling types over 2016. Inventory is building in the single family sector: particularly in west van and Vancouver. Clearly the demand at current price points for single family is a fraction of the supply. Market forces should eventually prevail and prices will drop unless we see foreign buyers return to the market in force in this segment. The GreenDP initiatives in the pipeline should play role at keeping that demand at bay by making foreign ownership even more expensive. I wonder how buyers today of $3m+ houses made their money in the first place since it’s not exactly a smart idea to buy in this market at that price point given market conditions and headwinds make buying a big risk. Greater fools I guess??

  • Reply
    TheDood 7 years ago

    YVR’s real estate price increases have unfolded over years. Any return to reality may take just as long. Anyone who thinks or says prices will continue to rise only does so because they have skin in the game and their livelihood is at stake. The economics certainly don’t support prices rising any further. Household debt in Canada now exceeds GDP – this is beyond stupid!

    Debt pressures on those holding multiple properties for investment will increase soon – higher interest rates; increased stress testing for buyers by banks; GreeNDP closing tax loopholes, etc, etc. Those who sell in future will be doing so in a falling market. Peak prices have come and gone.

    Turn out the lights, the party’s over!

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