Metro Vancouver Housing Market Report
Metro Vancouver’s property market has witnessed some degree of cooling in recent months, with home sales figures slowing down somewhat, after the record-breaking numbers that were observed in April 2021. Despite this drop in sales, however, the Metro Vancouver housing market is still considered to be a hot market overall, with a consistently paced rate of home sales still at play.
According to data released by the Real Estate Board of Greater Vancouver (REBGV), the number of residential homes sold in the region during May 2021 totalled 4,268, a colossal 187.4% increase year-on-year, with May 2020 only seeing 1,485 homes sold. It was, however, a 13% decrease from the number of homes sold in April 2021 (4,908). Interestingly, though, home sales in May 2021 were still 27.7% above the May sales average when taken over 10 years.
“While home sale and listing activity remained above our long-term averages in May, conditions moved back from the record-setting pace experienced throughout Metro Vancouver in March and April of this year,” REBGV economist, Keith Stewart, noted. “With a little less intensity in the market today than we saw earlier in the spring, home sellers need to ensure they’re working with their realtor to price their homes based on current market conditions.”
Listings have slowed
Between attached, detached and apartment-style properties, there were 7,125 new listings placed on the Multiple Listing Service (MLS) throughout the Metro Vancouver area during the month of May 2021. This figure represents a 93.4% increase when compared to the number listed in May 0f 2020 (3,684), but a 10.2% decrease from April 2021, a record month during which 7,938 residential properties were listed.
The total number of properties listed for sale in Metro Vancouver in May 2021 was 10,970 - a figure 10.5% higher than that of May 2020 (9,927), as well as a 7.1% increase when compared to April 2021, when the total stood at 10,245.
Which property types are trending?
Across all property types, the sales-to-active-listings ratio (SAR - the percentage of active listings that have sold), was 38.9% for May 2021. Broken down, these ratios were:
29.8% for detached homes
53.8% for townhouses
43.5% for apartments
Generally speaking, experts suggest that downward pressure placed on home prices occurs when the SAR ratio dips below 12% for a prolonged period of time. When it comes to upward pressure, home prices are said to be affected once the ratio surpasses 20% over a duration of several months or more.
Sales of detached properties in May reached 1,430, representing a 166% year-on-year increase from May 2020 (537). The detached benchmark price for May was $1,800600 - a 22.8% increase year-on-year, and up 1.7% from the previous month of April 2021.
Sales of apartment properties in May reached 2,049, representing a 213% year-on-year increase from May 2020 (653). The apartment home benchmark price for May was $737,100 - a 7.9% increase year-on-year, and up 1.2% from the previous month of April 2021.
Sales of attached properties in May reached 800, representing a 168% year-on-year increase from May 2020 (298). The attached home benchmark price for May was $936,300 - a 16.3% increase year-on-year, and up 1.8% from the previous month of April 2021.
The pandemic caused a significant shift in property markets around the world, and catapulted many regions from a buyer’s market into strong seller’s market conditions - Metro Vancouver included. These conditions highlight the importance of increasing the variety and volume of listings within the market.
“Doing this requires a more disciplined focus on planning, reducing building costs, understanding demographic changes, and expediting the building approval process,” said Stewart.
What about average property prices?
The composite benchmark price (typical residential property price) across all property types in Metro Vancouver was sitting at $1,172,800 in May - up 14% year-on-year, as well as a 1.5% increase when compared to the previous month of April 2021.
Meanwhile, some of the wider districts of Vancouver achieved similar benchmark property prices. Abbotsford properties sold for an average of $844,000, Burnaby properties for an average of $989,000, whilst Richmond, Coquitlam, and Surrey properties all achieved averages of $1,000,000.
Photo by Bench Accounting on Unsplash
With sales slowing down from the recent record peaks and a revised mortgage stress test that is resulting in reduced maximum borrowing amounts (by around 4.5%), it will be interesting to see what effects these factors have leading into the height of summer.
In addition, the average mortgage rates for a five-year fixed loan have risen back to over 2% since the beginning of the year, and close attention is currently being paid to just how these factors will affect the current market cycle.