Just the Facts: The Vancouver Real Estate Market 2019-2020
President David Peerless offers a brief, expert summary of the past year and what the coming year holds.
1) Due to uncertainty caused by aggressive taxation of Real Estate in BC, tightening of financing (Stress test), and a naturally cooling market, 2018-2019 resulted in the slowest two years in the Vancouver Real Estate marketplace since 1999.
2) When buyer’s confidence is shaken, they go to the sidelines and wait. As time goes by, this group grows into pent up buyer demand. At the same time, more buyers add to this demand due to population growth in the region.
3) We have had 17 months (February 2018-June 2019) where sales were lower than the same month in the previous year; something rarely seen in the Vancouver Market.
4) Residential sales since July 2019 (5 months in a row) have exceeded the same month in the previous year. This is always a signal of the market starting to recover.
5) Other signals:
Supply—unusually low for a period following a slowdown.
Media reporting—starting to report the market upswing.
Multiple offers—a significant increase due to buyers acting.
Open houses and new listings—generating lots of interest.
6) Pent up demand is a powerful force when coupled with time and a reduction in prices. People’s lives carry on regardless of Government policy. They get married, get older, have babies, want to help their children, move jobs, pass away, need a bigger/smaller home, etc., etc.
7) The ten year average for residential sales for the Real Estate Board of Greater Vancouver is 33,000 homes per year. This average actually grows naturally over time due to population growth in the region. Two years of sales at approximately 25,000 units leaves at least 16,000 buyers now waiting to buy on top of the buyers that will buy regardless of the market, the media or Government actions!
The waiting is over and the Real Estate market recovery has begun.