Buyer’s emerging with a market advantage
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It is not the change that we have seen in Metro Vancouver’s residential market but the speed of that change that has caught so many off guard. After two years of near-record sale and price increases, purchasers scrambling to top competing bids and a dramatic shortage of housing that has senior governments trying to speed new home construction, the current calm comes across as a bit unnerving.
Yet, when you dig down into the numbers, it reveals a very stable market that is gently shifting from a balanced environment to one favouring buyers – but not all markets are reacting the same. Still, the physiological effects should not be understated, and it will take some time for sellers and buyers to process it all.
We see it in homebuyers emerging into markets which are now tilted in their favour. Rather than facing multiple offers, they now enjoy multiple properties to choose from. Rather than concern about missing out, they can now be confident of getting into Canada’s most dynamic and rewarding housing market.
Half-way into this year, the June benchmark composite home price is $1,235,900, down 2% from May and 2.2% lower than three months ago. The benchmark is up 12.4% from a year ago, however, and is $186,400 higher than it was in June 2020 as the super cycle began.
There were 2,466 residential properties sold of all types in Greater Vancouver in June this year compared with 2,947 sold last month, 3,824 sales in June last year, 2,497 sold in June 2020 and 2,098 sold in June 2019 (the end of the last down cycle in the real estate market). These are not dramatic sale swings. June’s downturn in sales is a minor correction from the 10-year June average and was expected following three increases in the Bank of Canada lending rates since March. (A fourth is expected July 13).
The market remains active, just at different levels with the advantage now shifting to buyers. The lower end of the market is still a struggle for lack of inventory and continued strong demand, however.
The slowdown in sales is not yet creating a large surplus of homes for sale, as some sellers are holding off as they prepare for summer vacations with reduced COVID-19 restrictions and new housing starts remaining below demand.
June saw 5,410 new listings come to the Greater Vancouver market which was below the 6,491 added in May 2022 and less than the 5,981 new listings in June 2021. The number of new listings in June were 3.5% below the 10-year average (down from 4% above the 10-year average a month earlier). The total number of active listings rose to 10,839 at the end of June compared to 10,389 at the end of May.
The rate of increase was only 4% above the total in May compared to the 13% increase in active listings from April to May.
The inventory build-up is seen in the detached housing market, where the sales-to-active- listing ratio in June was 14.3%, as compared to 31.5% for townhomes and 30.2% for condo apartments. In most areas and especially at higher price points, it is already a buyer’s market for detached houses. Vancouver’s Westside detached sector has a 10 month’s supply available currently, West Vancouver is sitting with 14 months of inventory, Richmond 8 months and Whistler/Pemberton with a 10 month’s supply. Again, on the higher-price side, Vancouver’s Westside has seen townhouses and condos go up to 5 month’s supply from 3 months. What a switch and opportunity from a year ago. Buyers, your time is now!
As we have noted previously, outlier suburban markets that had led the sale and price parade are now seeing the biggest price corrections. Maple Ridge, Pitt Meadows, for example, saw the composite benchmark home price fall about 3.8% from May to June, compared to a 2% decline across all Greater Vancouver.
In the Fraser Valley, June benchmark detached house prices dropped 5.5% month-over-month in Cloverdale, 3.8% in White Rock/South Surrey and were down 4.4% in North Delta. In South Delta, the June median price for a detached-house price fell $100,000 from May to $1,499,000.
As pandemic measures ease, the revival of big-city events and more people returning to the office may convince more homebuyers to purchase closer to Vancouver, especially if city prices continue to moderate.
Other takeaways from the June market reveal the truth that real estate is regional, with contrasting performance among Metro municipalities.
•Richmond sales in June are on par with May, townhouse sales were up 33% and months of supply dropped down to 3. Active listings for townhouses dropped 8% from last month – an anomaly in the market.
•New Westminster also saw active listing totals drop from May to June – new listings were down more so than other areas and demand was strong. One of the highest absorption rates in Greater Vancouver.
•Coquitlam saw sluggish sales for townhouses in June while condo sales were strong resulting in a drop in the number of active listings.
•Port Moody had the same number of total sales in June as May with 29% less new listings with townhouses back down to 1 month supply.
•Port Coquitlam saw more sales in June, even in the detached market which resulted in a 20% drop in the number of active listings, but detached benchmark prices fell 5.9% from May, the sharpest decline in Greater Vancouver.
•Ladner saw a drop in average prices of close to 25% with the lower end of the market driving it thus producing less volume of dollar sales.
•Pitt Meadows and Maple Ridge continue to see increases in the number of active listings over last year – the outlier for this in Greater Vancouver.
Despite the moderating sales, the supply of housing remains a major concern. B.C. is seeing record levels of immigration and the provincial unemployment rate is 4.6% – which equates to near full employment and the second-best rate in Canada, so the demand for homeownership will increase. Yet housing starts in Metro Vancouver (which includes Langley and Surrey) were just 24, 531 as of June 1, down 45% from the 44,966 starts as of June 1, 2021 – and nearly 30% of new starts this year are rentals.
Here’s a summary of the numbers:
Greater Vancouver: Total June housing sales, at 2,466, were down 16% from May to the lowest monthly level this year, down 36% from June 2021. Active listings were at 10,839 at month end compared to 11,359 at that time last year and 10,389 (up 4%) at the end of May; New listings in June were down 17% compared to May 2022 and 10% lower compared to June 2021. Month’s supply of total residential listings is steady at 4 month’s supply (seller’s market conditions) and sales to listings ratio of 46% compared to 45%. The benchmark composite in June was $1,235,900, down 2% from May and 2.2% lower than three months earlier. Detached house prices have declined 1.8% over the past three months to $2,058,600, while June townhouse prices, at $1,115,600, were off 2.2% from May. Condo apartment prices were down 1.7% in June from a month earlier, at $766,300. Interestingly, the overall composite home price in Greater Vancouver is now about $210,000 higher than in June 2020, when the super cycle was beginning, but the number of sales is almost exactly the same.
Fraser Valley: The Valley market is experiencing a more dramatic change than Greater Vancouver. In June, the Fraser Valley Real Estate Board processed 1,281 sales, a decrease of 5.8% compared to May and a 43% decrease compared to June of last year. This June ended with a total active inventory of 6,474, a 4.7% increase compared to May, and 18.3% more than June 2021. Prices are also in play: the benchmark detached house price in June was down 3.5% from May at $1,653,000; townhouse prices dipped 2.7% from May to $894,300 and condo apartment prices fell 2.2% from a month earlier to $568,700.
“The combination of higher rates and low inventory will present a barrier to first-time buyers and could result in even slower sales over the coming months and erase price gains from the past 10 months or so,” cautioned Baldev Gill, chief executive officer of the Fraser Valley Real Estate Board. Compared to June 2020, benchmark detached house prices in the Valley are up $658,500; townhouse prices are $304,700 higher and the typical condo apartment has increased in value by $133,400.
Vancouver Westside: For all of us who aspire to a detached house on the prestigious Westside, that potential has increased slightly over the past few weeks. With detached sales down 23% in June from a month earlier, to 448 transactions, the benchmark price has increased just 3.7% from a year ago, the lowest for detached houses in Greater Vancouver markets. At $3,499,700, the benchmark price was down 1% from three months earlier. While shifting to a buyer’s market in June, the detached house market remains tight, with new listings down to 206 houses in June from 253 a month earlier. Meanwhile total residential sales on the Westside in June reached 448, down 21% from June 2021, with both townhome and condo apartment sales lower than a month earlier. The median townhouse price was $1,405,0000, while 323 condos sold at a median of $828,000. The total inventory of residential listings is up to a 6 month’s supply and the sale-to-listings ratio in June was 42% compared to 46% in May 2022 and 48% in June 2021.
Vancouver East Side: More detached houses are selling on the East Side than any other market in Greater Vancouver, with 77 transactions in June at a benchmark price of $1,904,000, a price down 2.2% from a month earlier and about $1.5 million less than in the neighbouring Westside and less expensive than houses in Richmond, the North Shore and Port Moody. With a relatively large inventory, with 253 new listings in June, this is a welcoming market with perhaps the best upside potential in the region. The new Vancouver Plan envisions higher density close to the new Broadway Skytrain and Millennium Line which will fuel detached lot assemblies and higher house prices on the East Side. Total residential sales in June, at 265, were down 17% from May and 41% lower than in June 2021. Condo apartment sales lead the East Side market, with 1,058 units sold in the last six months, including 137 in June at a median price of $680,000, a price that is higher than in May 2022 and from a year earlier, which is rare in Greater Vancouver. This remains a seller’s markets, despite active listings rising from May to 1,210 homes to June. June’s sales-to-listing ratio was a healthy 46% and new listings slipped 15% compared to a month and a year earlier.
North Vancouver: Existing condos and apartments may be the best strata buy in North Vancouver District because new “climate ready’ building codes will make construction more expensive. District council decided July 4 that anyone seeking to rezone a lot for higher-density housing will have to show an accounting for the embodied carbon in their project, which will be monitored over the life cycle of the project. This new policy, combined with strict new ventilation and air conditioning regulations will add considerable cost to new strata and rental buildings. (Wood emits less carbon than concrete, but wood prices have soared this year.) North Vancouver condo sales were down sharply in June, dropping to 97 transactions, down from 154 in May and 135 in June 2021. At $819,600 in June, the benchmark price for a condo was down 2.6% from a month earlier. Townhome prices are also tracking lower, down 4.3% from three months ago, to $1,347,200. Detached-house prices, benchmarked at $2,325,800, are down nearly 4% over the past three months. The supply of total residential listings is up to 3 months in this modest seller’s market, where the sales-to-listings ratio is running at 43%.
West Vancouver: Despite the turmoil in the Lower Mainland market, West Vancouver’s detached house prices appears bullet-proof. The benchmark house price in June was $3,490,000, up 5.3% from three months earlier to lead Metro Vancouver in price appreciation. Detached house sales in West Vancouver, at 32, were down from 46 in May. In the first six months of this year, 284 detached houses have sold, down from 405 in the same period last year. West Vancouver is now a buyer’s market for detached houses. There is in fact a swelling inventory of West Vancouver total listings, with a 10 month’s supply as of June and a sales-to-listing ratio falling to 30%, down from 42% a year ago.
Richmond: We have seen price reductions in Richmond recently, but the benchmark composite home price held fairly steady in June at $1,187,000, down just 1.2% from three months earlier. Total residential sales in June were 337, unchanged from May 2022 but down 29% from a year earlier.
Active Listings were at 1,380 at month end compared to 1,613 at that time last year and 1,385 (down 0.5%) at the end of May 2022. The inventory of total residential listings is steady at a 4 month’s supply (seller’s market conditions), with a sales to listings ratio of 54%.
Burnaby East: Burnaby East has the lowest detached house prices in Burnaby, and benchmark prices slipped again in June, dropping 3.8% from May after falling 6.1% over the previous three months. Total home sales in June were down 17% from May and nearly 50% lower than in June 2021. This is technically a seller’s market, with a 63% sales-to-listing ratio and lower inventory, with just 81 active listings as of the end of June for the second month in a row. Condo prices remain the highest in Burnaby, at $816,700 in June, but the benchmark price was down 2.3% from May 2022.
Burnaby North: Brentwood in North Burnaby is one of the largest high-rise condo construction sites in B.C., with the sixth tower now rising after the first five sold out. Grosvenor Canada is also developing 7.8 acres for 900 condos and 2,000 rental units. Condos are the big play in North Burnaby but the high supply has kept benchmark prices in check, dropping to $740,500 in June, virtually unchanged from three months earlier. Burnaby North detached house prices are holding firm at $2,128,000 in June, up 1.8% in three-months and 17.4% higher than a year earlier. Month’s supply of total residential listings is up to 4 month’s supply with a sales to listings ratio at a healthy 52% in this seller’s market.
Burnaby South: Total Units Sold in June were 144 – down 12% from May 2022, and down from 217 (34%) in June 2021. New Listings in June were down 7% compared to May 2022 and 20% lower compared to June 2021. The composite home price has been declining an average of 2.3% per month since April and is now at $1,149,100. There is an estimated 3 month’s supply of total listings and this seller’s market is seeing a sales-to-listing ratio of 51%.
New Westminster: Earlier this year, less than acre in uptown New Westminster zoned for high-density housing sold for $27.5 million – an indication of the potential being seen in the Royal City. We see this as promising market, especially right now. The composite benchmark home price is $845,300, down 2.4% from three months ago to the lowest level in Greater Vancouver. Condos are selling for $663,900, nearly $100,000 below the Greater Vancouver average; and detached house prices, at $1,541,100 in June, were down nearly 6% from April and down 4% from May. This is a technically a seller’s market, with a 60% sales-to-listing, but I would advise buyers to take a close look at New Westminster for true housing value.
Coquitlam: Total housing sales in June were 189, down 23% from May and 43% lower than June 2021. The composite home price, meanwhile, dropped 3.9% from May to $1,154,200, while detached prices fell by the same amount to $1,874,100.
Active Listings were at 642 in June, compared to 745 at that time last year and 642 at the end of May; The June sales-to-listings ratio was 51% compared to 53% in May 2022 and 72% in June 2021. This remains a seller’s market, despite recent drops in sales and prices.
Port Moody: Sales of detached houses were down 50% in June, to 14, compared to June 2021, but the detached house price remains 22% higher than a year ago at $2,201,300, the highest in the Tri-Cities. This reflects the higher values seen in the Belcarra neighbourhood. Port Moody remains very much a seller’s market. Total housing sales in June were 57 – the same as in May 2022, but down from 40% from June 2021. Active Listings were at 218 at month end compared to 203 at that time last year and 209 at the end of May; Month’s supply of total residential listings is steady at 4 month’s supply and the sales-to-listings ratio is 48% compared to 34% in May 2022.
Port Coquitlam: Detached house prices have been tracking down for three months and dropped 5.9% from May to a June benchmark of $1,427,900. Condo prices are holding firm at $648,300, virtually unchanged since March. Total housing sales in June reached 94, up from 91 in May 2022, but down 33% from June 2021, The inventory of total residential listings is down to a 2 month’s supply and the June sales to listings ratio of 61% compares to 43% in May 2022 and 84% in June 2021 in this seller’s market.
Pitt Meadows: The composite home benchmark price was down 3.9% in June from a month earlier, at $988,000, after tracking down 2.1% per month since the end of March. Total units old in June were 23 – down from 24 (4%) in May 2022 and down from 60 (62%) in June 2021. Active listings were at 98 at month end compared to 65 at that time last year and 84 (up 17%) at the end of May. June’s sales to listings ratio was 38% compared to 30% in May 2022 and 73% in June 2021 in this calming market.
Maple Ridge: The housing market has cooled considerably, with total sales down 45% in June from the same month last year and falling 24% month-over-month in June to just 135 transactions, Detached house prices dropped 7.1% from March to $1,379,700. June townhouse prices are down 3% from May at $833,400, with condo prices down 1.8% to $564,300. New listings in June were down 10% compared to May 2022, but up 49% compared to June 2021. The sales-to-listings ratio was 32% in June, compared to 39% in May 2022 and 89% in June 2021.
Ladner: Total homes sold in June were 29 – up from 28 (4%) in May 2022 but down from 52 (44%) in June 2021. The composite home price in June, at $1,189,200, was down 3.6% from May but still 16.6% higher than a year earlier. Month’s supply of total residential listings is steady at 4 month’s supply (seller’s market conditions) and sales to listings ratio of 53% compares to 42% in May 2022 and 64% in June 2021.
Tsawwassen: This is primarily a detached market, but detached house prices fell 2.7% in June from a month earlier to $1,687,700. Total housing sales in June were 40, down 9% from May and a sharp 43% drop from June 2021. Total active listings had been holding steady at 175, but new listings dropped 30% from May and were down 21% compared to Jube 2021.The sales-to-listing ratio is a respectable 51%, as it appears that the seller’s advantage is holding.