The Metro Vancouver resale real estate market is primed for a comeback!
Never have we seen the market with sales and listings numbers like we are experiencing right now. Even with monthly sales below that of a typical May and the 10-year average, fundamentals shown by new and active listing counts that there is significant confidence. And with sales in May 44% above those in April, it’s not a slumping market, but one with a gasp of breath! Ask REALTORS® how many multiple offers they have experienced in the last month. Supply is the story!
The market is always right—supply and demand ultimately dictates it and the recent intervention on the demand side by the provincial government through taxes and the federal government through the stress test only serve reduce prices significantly in the high end for those the government wanted out of this market and prevent home buyers from getting into homes in the bottom end—affordability has not improved and will not get any better without a serious look at the supply side.
Supply Side of the Equation Continually Ignored!
Supply of homes will continue to be an issue without being addressed by government at all levels. With increased taxes, costs and restrictive zoning, developers are pulling back and we’ll see a lack of new supply and especially the right supply in the next 2 to 3 years. That coupled with low resale inventories now, significant pent up demand, a growing population and Metro Vancouver being a region where people gravitate to, the cycle will continue with demand outstripping supply and prices rising.
When you look at the numbers, we’ve seen 3 previous significant slow downs in Vancouver real estate. During 1997 to 1999, 2008 to 2009 and 2010 to 2013 home sales in Greater Vancouver persisted below 2,000 units. In each of those first two periods, there were over 20,000 listings and close to it in the last. This recent slow down we’re seeing the market struggle to get over 15,000 active listings—at a time when the overall housing stock is at it’s highest!
The lack of homes listed during one of the slowest markets we’ve encountered in 30 years shows that sellers are not looking to “panic sell”—some will sell out of need and agree to prices below what they would like, others will hold and wait.
There is confidence in the Metro Vancouver real estate market—with more buyers and fewer sellers, it will lead to stabilization in the market.
We may be seeing prices bottom out in the lower and middle end of the market, but there are still great opportunities for buyers, but they are diminishing.
Since Dexter Realty released Kevin’s analysis of recent sales data, news outlets are taking note and the story being told is starting to change. The Daily Hive has already posted their own article on Metro Vancouver’s real estate, drawing heavily upon Kevin’s expertise. The the Vancouver Courier, Business in Vancouver and Western Investor have done articles as well. We won’t be surprised to see even more outlets following soon following suit.
For more information or to receive Kevin’s Market Report contact him at firstname.lastname@example.org
Kevin Skipworth, B.A. Economics
Partner/Managing Broker & Chief Economist