Current Market Conditions

Welcome to the DEXTER ASSOCIATES REALTY STATISTICAL UPDATE PAGE. We want to ensure that our REALTORS® and our clients are well informed on current market conditions.

In our Blog below you will find a weekly market update. Within the Blog, there are 2 links updated weekly that separate and break down listing and sales statistics for market areas in and around the City of Vancouver. One link combines all residential types of properties for a select group of market areas and another link breaks down those areas by houses, townhouses and apartments.

If you have any questions at all, do not hesitate to contact one of our Dexter Associates!

On February 20, 2018 the B.C. Provincial Government lead by the New Democratic Party released their first budget after forming a coalition government with the Green Party last summer. While there has much speculation about what would be contained in the budget, it was believed that housing affordability would be a key target for the government – and it certainly was. While the tools brought forward by the government in the budget will have some impact on the real estate market, affordability is not likely to be directly affected to any great degree. In fact, it will likely make the most competitive segment of the market, properties below $1,000,000, even more competitive. And with the current lack of supply in that market segment continuing, pressure on prices will continue and thus having an adverse effect on affordability where it is needed most.

 

To understand why the government put forth the policies they did, one must understand the climate of the market and the sense of the current public perception. The City of Vancouver is seen as a jewel for those living here and visiting. With its location being nestled against local mountains, the ocean on its doorstep and a climate that is the envy to the rest of Canada, it draws many people to visit and some to eventually relocate. The Winter Olympics of 2010 were one of the biggest advertisements for the region – showing the diversity of the city not to mention that a world class ski resort was only a 90 minute drive away! With Vancouver having the fastest growing population in Canada and one of the fastest growing populations out of developed nations, the need for homes will continue to be an issue going forward. Immigration will be and needs to be a driving force of Canada in the years to come, with two thirds of those immigrating being economic drivers.  

 

So what were the changes announced in the February 20th Budget?

 

 

The Property Transfer Tax (Stamp Duty) paid when purchasing residential property will be increased to 5% (from 3%) on the purchase price above $3,000,000 effective February 21st, 2018 for all properties in the Greater Vancouver Regional District and at this point it now appears to be regardless of the date the contract is written.

 

  • The effect? The market above $3,000,000 has already been quiet in Metro Vancouver. With the majority of properties in that price range in West Vancouver and Vancouver’s West Side, we’ve seen sales decline significantly in the last 2 years, even prior to the initial Foreign Buyer’s Tax coming in to place. The Property Transfer Tax was increased from 2% to 3% for properties above $2,000,000 in February 2016 which had an effect at that time. It will put greater pressure on prices below $3,000,000. The biggest effect will be the lack of transitional rules for properties in Greater Vancouver – meaning any written contracts completing after February 20th, 2018 will be subject to the increase.

 

The Foreign Buyer Tax has been increased to 20% as of February 21, 2018 and expanded to areas outside of the Greater Vancouver Regional District (Capital Regional District, Fraser Valley Regional District, Regional District of the Central Okanagan, Regional District of Nanaimo). The timelines for transitional rules are in the link below, but essentially the increased Foreign Buyer’s Tax is effective on all deals completing as of February 20, 2018 in Greater Vancouver and in the other areas affected if contracts were dated prior to February 21th, 2018 and complete prior to May 18, 2018 then they would be exempt. Outside those dates, all properties will be subject to the Foreign Buyer Tax of 20% in those areas noted.

 

https://www2.gov.bc.ca/gov/content/taxes/property-taxes/property-transfer-tax/understand/additional-property-transfer-tax#specified-areas

 

  • For Greater Vancouver, the tax isn’t new. While an increase of 5% will impact transactions the bigger effect will be in those areas that are new to the tax. Again, transitional rules were not put in place for Greater Vancouver. While Foreign Buyer numbers for all areas now affected by the tax show less than 5% being a Foreign Buyer, further measures on identifying beneficial owners may result in further taxation not accounted in these numbers. On the whole, the effects in Greater Vancouver will continue to push buyers to the lower end of the market, and continue to see the luxury property market soften. It may also push some buyers back to Greater Vancouver from other areas, specifically Victoria and Nanaimo who went there to buy and avoid the Foreign Buyer Tax.

 

 

 

For the first time, there is a speculation tax on properties owned by individuals not paying Income Tax in BC and that keep the property vacant. The tax will be 0.5% of assessed value in 2018 and increased to 2% in 2019 for all areas affected by the Foreign Buyer Tax. The speculation tax will be applied to all properties that are not owner occupied or qualify as a long-term rental property. There are still details of the Speculation Tax to be determined by the Provincial Government as to its implementation and potential exemptions. Details of the tax so far are in the link below.

 

https://www2.gov.bc.ca/assets/gov/taxes/property-taxes/publications/is-2018-001-speculation-tax.pdf

 

  • The effect will likely see some rental properties being introduced into the market that have been vacant as well as some supply coming onto the resale market as owners that will be subject to the tax on their property decide to sell instead of renting their property or paying the tax. While the numbers of properties potentially affected are not known, and vacant homes owned from someone residing outside British Columbia are widely speculated (how ironic), it will take time to see any real effects. It may turn investment away from affected areas – especially vacation homes in the Central Okanagan which sees individuals from Alberta purchasing vacation homes there and already owning homes there – which they may look to sell instead of paying the tax.

 

The government will be raising the amount of school taxes for properties valued at $3,000,000 and more. Properties valued between $3,000,000 and $4,000,000 will be subject to a 0.2% tax and a 0.4% tax on the assessed value above $4,000,000 beginning next year.

 

  • Again another measure which will weaken the luxury home market further and put pressure on prices to come down above $3,000,000 as the layered taxes take their toll. The areas mostly affected would be West Vancouver, Vancouver West and Richmond. Retired homeowners in these areas will be affected the most as this will be a significant increase in their taxes - $8,000 annually on a property assessed at $4,000,000. While they have an ability to defer their taxes, some may choose to sell or be forced to sell. This will add supply into a market with depressed demand.

 

In attempting to deal with money laundering and tax fraud, the Provincial Government is going to begin collecting information on pre-sales and assignments of contracts from developers. This data base will be shared with provincial and federal tax authorities. As well, additional information on beneficial owners of corporations will be required on property transfer forms. A registry of beneficially-owned properties will be established and publicly available through the Land Title Office.

 

  • While the Provincial Government didn’t put any controls or added taxes in place for pre-sale (off plan) sales including the assignment of contracts, this measure may be the first step into looking at some sort of taxation or demand side measure on those type of sales. The provincial government has indicated all the steps are the beginning of measures to be put in place, depending on the reaction of the market.

 

The Supply Side of the real estate equation was left mostly untouched by the government for resale and brand new properties. There was language to aid in providing more purpose built rental and affordable housing (114,000 units over the next 10 years) along with commitments to student housing and allowing post-secondary institutions to borrow to build student housing. But with labour shortages currently occurring to a large degree in the construction industry, any increased building outside market for sale units will only further restrict supply as labour is moved away from that type of construction. So while the government is looking to work with Mayors to increase density around transit hubs, the ability to build may become harder to do. And without any impact on speeding up the permitting process, delays will continue to be a factor.

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Sales and listings stats are attached as of February 11, 2018. Total sales so far in February for Greater Vancouver is at 787 compared to 948 at the same point in February last year. New listings are at 1,633 so far compared to 1,383 at the same point last year. Vancouver’s West Side is off last year’s pace in February significantly with on 144 homes sold compared to 222 at the same point last year, and a much higher stock of listings coming on. Markets going east are showing higher absorption rates, with price point being the biggest driver in the market currently. The new financing rules are undoubtedly having their impact on the market. With the lack of inventory on the lower end, properties are still seeing multiple offers though and the lack of available produce may be part of the reason for slower sales to start. But with a trend so far of stronger new listings in February, competition may ease slightly if at all. The balance of price and ability to pay may put some controls on the market in the higher price points of apartments and townhouses. With the Provincial budget coming in just over a week, a lot will be happening with very little month left! Here is a summary of the activity so far:

 

Sales and Listings Stats All Regional for Feb 11 2018

 

Sales and Listings Stats Houses Townhouses and Condos for Feb 11 2018

 

Greater Vancouver – 787 Units Sold so far in February 2018 compared to 948 Units as of February 12, 2017. Total New Listings so far in February 2018 are 1,633 compared to 1,383 at the same time in February 2017. Total Active Listings are at 7,842 (7,841 at the same time last year). Sales To Listings Ratio is at 48% compared to 69% in January 2017.

 

Vancouver West - 144 Units Sold so far in February 2018 compared to 222 Units Sold as of February 12, 2017. Total New Listings so far in February 2018 are 376 compared to 267 at the same time in February 2017. Total Active Listings are at 1,458 (1,325 at the same time last year). Sales To Listings Ratio is at 38% compared to 83% in January 2017.

 

Vancouver East – 88 Units Sold so far in February 2018 compared to 92 Units Sold as of February 12, 2017. Total New Listings so far in February 2018 are 152 compared to 147 at the same time in February 2017. Total Active Listings are at 919 (894 at the same time last year). Sales To Listings Ratio is at 57% compared to 63% in January 2017.

 

North Vancouver – 58 Units Sold so far in February 2018 compared to 84 Units Sold as of February 12, 2017. Total New Listings so far in February 2018 are 103 compared to 113at the same time in February 2017. Total Active Listings are at 440 (398 at the same time last year). Sales To Listings Ratio is at 56% compared to 74% in January 2017.

 

West Vancouver – 787 Units Sold so far in February 2018 compared to 1,649 Units Sold as of February 12, 2017. Total New Listings so far in February 2018 are 1,633 compared to 1,383 at the same time in February 2017. Total Active Listings are at 7,842 (7,841 at the same time last year). Sales To Listings Ratio is at 48% compared to 69% in January 2017.

 

Richmond –  106 units Sold so far in February 2018 compared to 116Units Sold as of February 12, 2017. Total New Listings so far in February 2018 are 1,633 compared to 1,383 at the same time in February 2017. Total Active Listings are at 183 (184 at the same time last year). Sales To Listings Ratio is at 48% compared to 69% in January 2017.

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Attached are the Sales and Listings Report updated to the end of January 2018. The real estate market in Metro Vancouver clearly is suffering from a lack of supply currently. For the third straight year, new listings for Greater Vancouver in January decreased from the year before. With 3,906 new listings in January this year, it was 21 per cent down from the 10 year average. Even with snow being on the ground for most of January last year, Sellers were still more hesitant to list their homes for sale this January. There were 8 per cent less new listings compared to January 2017, 14 per cent less new listings than January 2016 and 20 per cent less new listings than January 2015. Total sales for Greater Vancouver in January were 1,864 – up 6.5 per cent from January 2017 and up 6.4 per cent on the ten year average. Detached sales were down 24.8 per cent from the 10-year January average, townhouse sales increased 14.3 per cent and apartment sales were up 31.6 per cent over the same period. Total active listings were at 7,371 at month’s end, compared to 7,874 in January 2017, 7,471 in January 2016 and 11,753 in January 2015.

 

So where have all the Sellers gone? Detached homes are sitting in balanced to buyer’s market conditions with 5 month’s supply and higher in some areas (West Side Detached is sitting at 13 month’s supply with only 46 homes sold in January (compared to 36 in January 2017). While townhouse and apartments have 2 month’s supply and in some areas 1 month’s supply. That segment of the market continues to be the most active and under-inventoried part of real estate in Metro Vancouver. And with that, pressure on prices continues with multiple offer scenarios still occurring – more so in the apartment market. Will February see an increase in listings? That would certainly be helpful for buyers if it were to happen. With the global economy continuing to be strong, and equities markets allowing for increases in stock equity, there may be more money available for real estate as money is pulled out of stocks and put in the real estate market to balance portfolios. With an interest rate increase in January, the more stringent qualifying requirement for mortgages with over 20 per cent down payment and the provincial budget coming out on February with a number of items to address housing affordability, it will be a month of potential answers to this question of inventory as we see how the market reacts.

 

“Demand remains elevated and listings scarce in the attached and apartment markets across Metro Vancouver,” Jill Oudil, Real Estate Board of Greater Vancouver president said. “Buyers in the detached market are facing less competition and have much more selection to choose from. For detached home sellers to be successful, it’s important to set prices that reflect today’s market trends.”

 

In the Fraser Valley, there were 1,210 sales of all property types which was a 24 per cent increase compared to January of last year and a 10 per cent decrease from December 2017. Likely as many buyers were trying to purchase ahead of the mortgage rule changes that came into place on January 1, 2018. Of the 1,210 sales last month, 281 were townhouses and 338 were apartments. There were 2,092 new listings in January, a 63.8 per cent increase from December 2017 and a 3.9 per cent decrease compared to January 2017.

 

Sales and Listings Stats Houses Townhouses Condos January 2018

 

Sales and Listings Stats All Regional January 2018

 

Here’s a summary of the numbers:

 

Greater Vancouver: Total Units Sold in January 2018 was 1,846 – up from 1,553 (19%) from January 2017, down from 2,574 (28%) in January 2016; Active Listings are at 7,371 compared to 7,834 at this time last year; New Listings in January 2018 were down 8% compared to January 2017; Month’s Supply of Total Residential Listings is at 4 Month’s Supply (Seller’s Market for Apartments and Townhouses with Detached Acting Like a Buyer’s Market) and a Sales to Listings Ratio of 47% compared to 37% in January 2017.

 

Vancouver Westside Residential: Total Units Sold in January 2018 was 313 – up from 271 (15%) from January 2017, down from 473 (34%) in January 2016; Active Listings are at 1,331 compared to 1,355 at this time last year; New Listings in January 2018 were down 9% compared to January 2017; Month’s Supply of Total Residential Listings is at 4 Month’s Supply (Seller’s Market for Apartments and Townhouses with Detached Acting Like a Buyer’s Market) and a Sales to Listings Ratio of 39% compared to 30% in January 2017.

 

Vancouver Eastside Residential: Total Units Sold in January 2018 was 137 – down from 139 (1%) from January 2017, down from 207 (34%) in January 2016; Active Listings are at 922 compared to 874 at this time last year; New Listings in January 2018 are up 5% compared to January 2017; Month’s Supply of Total Residential Listings is up to 7 Month’s Supply (Balanced Market with Detached Acting Like a Buyer’s Market) and a Sales to Listings Ratio of 34% compared to 33% in January 2017.

 

North Vancouver Residential Total Units Sold in January 2018 was 132 – up from 107 (23%) from January 2017, down from 167 (21%) in January 2018; Active Listings are at 413 compared to 398 at this time last year; New Listings in January 2018 were down 1% compared to January 2017; Month’s Supply of Total Residential Listings is up to 3 Month’s Supply (Seller’s Market for Apartments and Townhouses with some Buyer’s Market tendencies) and a Sales to Listings Ratio of 45% compared to 36% in January 2017.

 

West Vancouver Houses: Total Units Sold in January 2017 was 43 – up from 26 (65%) from January 2017, down from 108 (60%) in January 2016; Active Listings are at 493 compared to 416 at this time last year; New Listings in January 2018 were down 5% compared to January 2017; Month’s Supply of Total Residential Listings is up to 11 Month’s Supply (Extreme Buyer’s Market) and a Sales to Listings Ratio of 23% compared to 13% in January 2017.

 

Richmond Residential: Total Units Sold in January 2017 was 275 – up from 225 (22%) from January 2017, down from 396 (30%) in January 2016; Active Listings are at 1,104 compared to 1,154 at this time last year; New Listings in January 2018 were down 18% compared to January 2017; Month’s Supply of Total Residential Listings is at 4 Month’s Supply (Seller’s Market for Apartments and Townhouses with Detached Acting Like a Buyer’s Market) and a Sales to Listings Ratio of 50% compared to 34% in January 2017.

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