Suburban safety valves close as prices rise in step
The shocking shortage of homes for sale across Metro Vancouver has had the unsettling effects of levelling residential prices and stunting supply from Burrard Inlet to well south of the Fraser River. The suburban safety valves for those seeking more affordable homes have nearly vanished.
The price gap between the average home price in Greater Vancouver and the eastern Fraser Valley was once a canyon: today it is a creek.
In October 2019, just three years ago, the composite home price difference between Greater Vancouver and the Fraser Valley was $272,500. This October that had narrowed to less than $150,000. In the detached housing market, it now costs nearly the same to buy a house in North Burnaby ($1.74 million) or East Vancouver ($1.71 million) as in South Surrey-White Rock, where the October benchmark was $1.76 million. A house in Langley ($1.45 million) is higher than in New Westminster or Port Coquitlam and within $50,000 of a detached house in East Burnaby.
The composite benchmark price in Chilliwack in October, at $800,000, was higher than in New Westminster ($749,200); and within $200,000 of most of the Tri-Cities market.
This price-gap shrinkage is the result of and a key reason for the current lack of new listings on the Metro Vancouver market. In the misty past – like 36 months ago – Greater Vancouver homebuyers could count on selling and downsizing to a smaller, pleasant Fraser Valley community and pocketing a healthy premium. First-time buyers would start their real estate ascension buying in the eastern Valley and, if desired, leverage up to a place in Greater Vancouver.
Now, though, many homeowners are reluctant to list because their exit strategy has been blocked. It is difficult to downsize or upgrade to a place 30 or 60 kilometres away when the home prices are nearly identical or you are you don’t feel you will be able to find a home to purchase.
The effect has been devastating.
In October, Greater Vancouver saw 3,455 homes sell but only 4,120 new listings were added to the market. With an 86% sale- to-listings ratio in the month, nearly every listing that came on the market sold – and in some areas like Burnaby, Coquitlam, Port Moody and Tsawwassen, there were more sales in the month than there were new listings.
In the Fraser Valley in October there were 1,938 total sales and a mere 2,188 new listings. That is a sales-to-listing ratio of 88.5%.
Will there be any properties for sale on the Metro Vancouver market by the end of 2021? At the rate of decline in the number of active listings, it would seem we could very well run out. For years, there’s been a concentrated, coordinated push by all three levels of government to hold back housing demand. But now we’re left with a complete lack of supply, the lowest levels ever recorded at this time of year.
Maybe one day we’ll stop saying how low the number of active listings is and that each month won’t be setting a record for how low they are. Likely not in the near term though. At the end of October there were 8,492 active listings available for sale in Greater Vancouver, which was less than the 9,728 active listings at the end of September. Sales for the month, however, were up 11% from September and 22.4% above the 10-year October average.
In the Fraser Valley, there were just 3,447 active listings in October, down a stunning 49.8% from October 2020 and nearly 10% lower than in September 2021. But total sales were the third-highest for October on record, 18.2% higher than in October of last year and nearly 5% higher than in September 2021.
As we have seen for some months, year-over-year condominium apartment sales in October tracked above last year while detached and townhouse markets are showing less sales than in the same month a year ago.
Compared to October 2020, the number of apartment sales in October this year were up 14%, while townhouses were down 22% and detached home transactions down 18%. On the supply side, the number of new listings for detached homes in October was down 29% year over year with active listings down 24%, townhouse new listings were down 22% with active listings down 47% and apartment new listings down 25% and active listings down 38%.
And, unlike other years, we can’t expect a surge of new housing starts to provide the necessary inventory. Across all of Metro Vancouver, total starts as of September were down 37% from August to just 14,109 units – and 24% of these were rental units.
Here’s a summary of the numbers:
Greater Vancouver: There were a total of 3,545 residential transactions in October, up 11% from September 2021, but down 6% from October 2020. Active listings were at 8,492 at month end compared to 13,066 at that time last year and 9,728 at the end of September. New listings in October were down 22% compared to September 2021 and 28% lower when compared to October 2020. Month’s supply of total residential listings is down to 2 months, signalling a strong seller’s market with a sales-to-listing ratio of 86%, compared to 60% a month earlier. The composite home price in October was $1,199,400, up 1.1% from a month earlier and 14.7% higher than in October 2020.
Fraser Valley: There were a total of 1,983 home sales in October, up 3.9% from a month earlier, but down 18.2% from October 2020. After rebounding slightly in September, new listings decreased in October. Only 2,188 new listings were added, a decrease of 29% compared to last year, and a decrease of 6.6% compared to September 2021. The month ended with a total active inventory of 3,447, which is a 9.6% decrease compared to September, and down 49.8% compared to October 2020. The average composite home price is now $1,053,635, up 2.8% from September 2021 and 24.6% higher than in October of last year.
Vancouver Westside: The October benchmark price of a Westside detached house was $3,450,000 and the composite home price was $1,365,300, which is double the Canada-wide composite average. Yet Westside detached house sales were up 31%, at 108 transactions, from September 2021 and total sales, at 595, were 7% higher, month over month. A lack of supply – new listings in October were down 21% from September – has had a counterintuitive effect on prices. The benchmark detached house price was down 1.3% from a month earlier and remained slightly lower (down 0.5%) from three months ago. Townhouse benchmark prices, at $1,300,300, have increased just 0.7% from August and the benchmark condo apartment price, at $823,300, is virtually unchanged from six months ago. The sales-to-new listing ratio for houses was 68%; it was 55% from townhouses and 61% for condo apartments, all up marginally from the monthly averages this year.
Vancouver East Side: More detached houses sold, 137, on the East Side of Vancouver in October than in any other sub-market in all of Greater Vancouver, including the West Side. The key reasons are price and potential. At a benchmark price of $1,717,400, East Side houses are less expensive than across Greater Vancouver and remain about half the price of homes west of Quebec Street. As for potential, the
City of Vancouver has new plan to scrapping the rezoning and public hearings for six-storey rental projects along arterial streets from Hastings-Sunrise to Dunbar, with most of the action expected on the East Side. This could encourage developers. The East Side will also soon have the new Broadway Corridor transit hubs; the $2 billion new St. Paul’s Hospital is underway and Mount Pleasant East is undergoing a high-tech job explosion, as is the emerging False Creek Flats. East Vancouver’s sales-to-listing ratio is running at 87% for both houses and townhouses, due to severe shortage of new listings, while 76% of new listings for condos sold in October. Its median condo price, with 178 sales in October, was $662,000.
North Vancouver: North Vancouver’s need for more housing supply is underlined by the sudden spike in school enrollment this year, with 440 more local students when schools opened in September compared to a year earlier. International student enrollment shot up to 531, though projections were for less than 380. This is enough students to fill two elementary schools. All these children and their parents need places to live but total new listings for detached houses in October were down about 40% from September to just 94 houses, and the sales-to-listing ratio was 100%. There was a slight uptick in townhouse listings, at 54, while new listings for condo apartments fell to 142 units, down from 224 a month earlier. The sales-to-listing ratio for condos hit 96%, the highest monthly level so far this year. The total supply of North Vancouver homes is down to 2 months, while the composite home price in October was up 0.5% from September, at $1,245,600. The benchmark detached house price led the increase, with a 1.4% month-to-month rise to $1,939,500.
West Vancouver: Attempts to build more multi-family strata supply in West Vancouver is mixed. A 68-unit condo project was recently approved at Taylor Wave and Marine Drive but a similar development on Bellevue Avenue was refused in mid-October. Only 24 strata homes have started this year. Meanwhile, the total supply of homes for sale is down to a 6-month inventory, as total new listings in October dropped 23% from a month earlier. West Vancouver posted 60 detached sales in October, up from 41 in September while the benchmark detached price increased 1.9% to $$3,201,200 and the sales success ratio hit 48%. Only 14 townhouses and 22 condo apartments were added to the market in October, created a sales-to-new-listing ratio of 64% and 86%, respectively for the sectors.
Richmond: Provincial legislation introduced in late October is meant to speed up residential developments at the municipal level, and Richmond could use such help to get more homes started. With a sales-to-listing ratio of 86% in October, Richmond has just 2 months of total housing inventory. October saw total sales increase 11% from September to 479 transactions. This was led by 243 sales of condo apartments, at a benchmark price of $731,100, a price up 0.9% from a month earlier. The benchmark detached house price in Richmond, at $1,950,600 in October, was unchanged from September. Sales of townhouses were up about 10% from September, to 117 transactions, while the benchmark townhouse price held steady at $961,200.
Burnaby East: Burnaby East is the most affordable of the Burnaby markets, with the October composite price at $1,099,000 and detached houses selling for $1,501,700, nearly unchanged from a month earlier. Total housing sales reached 44 in October, up 16% from September, but new listings were down 33% month-over-month and 47% below October 2020. The supply of total residential listings is down to 1 month with a sales to listings ratio of 133% in October compared to 78% in September 2021.
Burnaby North: Burnaby North could be the multiple-offer centre of Greater Vancouver as a 51% drop in new listings collided with a 16% increase in sales, month-over-month, in October. The result was predictable as eager buyers competed for scant opportunities. Strata prices are steadily rising and the composite home price, at $1,122,900, is now 11.7% higher than in October 2020.
There is an acute shortage of townhouses, seen in the average 1.1% price increase month-over-month this year, to an October benchmark of $841,500. Not a single new townhouse has started construction this year in North Burnaby and just 16 new townhouses under construction. Condo apartments dominate the market, selling for a benchmark of $733,200, up 4.4% from six months ago. More supply is coming, with 2,274 new condos under construction as of October 1. Detached house prices have levelled off at $1,743,700, up just 2% from six months earlier. The overall sales-to-listing ratio hit 102% in October in this strong seller’s market.
Burnaby South: Total October housing sales were up 25% from September to 228 transactions, while new listings were down 20% in the same period, a common story across the entire region. With a total inventory at a 2-month supply, the sales-to-listing ratio in October hit 100%, which is as tight as you can get. The composite home price in October was up 9.2% from a year earlier at $1,057,200.
New Westminster: The Royal City posted a 95% sales-to-listing ratio in October, compared to just 56% a month earlier, as sales increased 27% and new listings dropped 26% in the same period. The supply of total residential listings is down to 2 months. Prices continue to rise across the board, with detached houses up 1.3% from September at $1,364,600; townhouse prices up nearly 2% month-over-month to $$864,300; and the typical condo apartment selling for $568,000, 7.6% higher than a year ago and up 0.2% from September 2021.
Coquitlam: The City of Coquitlam has put a 4.4-acre townhouse site on the market, with RFO bids being accepted until November 10. Let’s hope some developer bites, because there were only 29 townhouses added to the MLS service in October while there were 34 townhouse sales, resulting in a 134% sales-to-listing ratio. The benchmark townhouse price is now $878,100, up 20.9% from the same month last year and they have been rising about 2% month-over-month since then. The housing shortage is being seen right across Coquitlam, with just 434 total active listings, down about 50% in October compared to October 2020. The resulting sales-to-listing ratio is 111%, which is unsustainable unless a fresh supply is added.
Port Moody: The City of Port Moody, which has earned a recent reputation as anti-development since 2018, appears to have seen the light, because it is running out of housing inventory which is driving prices higher. At $1,878,400 in October, detached house prices are nearly 24% higher than a year ago and among the highest of all suburban markets in Greater Vancouver. Strata prices are also rising, ascending an average of 14% over the past 12 months. The city is now hoping to increase strata supply and, as one city councillor put it “stop beating builders with a stick.” So far in 2021 only 28 townhouses have started construction in Port Moody, along with 378 condo apartments.
Port Coquitlam: This enclave of relative stability and affordability has been discovered, resulting in a 24% spike in sales in October, to 120 transactions, compared to a month earlier. The benchmark detached house is $1,289,000, the lowest price in the Tri-Cities market. The median condo apartment price, however, increased $40,000 from September to October when it reached $543,900. Total new listings in October were down 10% compared to September 2021, and 26% lower than in October 2020, which will increase price pressure. Port Coquitlam has a total inventory of just one month supply of homes, and the sales ratio is running at 92%, so buyers looking at this market should act quickly.
Pitt Meadows: After a year of quite strong sales, Pitt Meadows is running out of homes for sale, literally, which stalled total October sales at just 34 transactions, down 17% from September. There are just 34 active listings on the market, which means that virtually everything is selling. Detached house prices remain among the lowest in Greater Vancouver, but benchmark values are rising steadily and reached $1,268,000 this October, notching a 4.6% increase from September, the biggest month-over-month increase in Greater Vancouver. There is only a 1-month supply of listings and this could soon be lower as the sales-to-listing ratio is now running at 109%.
Maple Ridge: Total sales in October, at 182, were up 3% from September 2021 but down a stunning 36% from October 2020. The reason? Your guessed it: a supply shortage. New listings in October were down 26% compared to September 202, and 41% lower than in October 2020. We estimate, that with the current sales-to-listing ratio at 110%, the total inventory of listings could vanish in a month if the market remains unchanged. The detached house price jumped 2.3% from September to $1,176,600 and condo apartment values increased the same, to $451,000, up nearly 25% from October 2020.
Ladner: Hundreds of Delta detached-house owners remain under the old land use contracts, but council is taking steps to end the contracts, which restrict what can be done with a property. Mostly created in the 1970s, land use contracts were signed at the time of a property’s original subdivision and outline various development guidelines. All of the contracts are to expire in 2024, but if the Ladner house you are planning to buy is still under the old rules, it is possible to receive permission for such things as adding a secondary suite. Ladner saw a total of 38 home sales in October, unchanged from a month earlier, but the total new listings increased 11% from September, which is rare in the region. The composite home price was up 2.6% from September to $1,074,100 in October, while the detached house price was 2% higher, at $1,134,200.
Tsawwassen: With a sales-to-listing ratio of 112% in October, the housing supply is being threatened. In October, 64 homes sold, up 12% from September, but new listings were down 22% month over month. The typical detached house sold in October for $1,460,700, up 3.6% (yes, that is about $44,000) from September. There is 2-month supply of homes in this seller’s market.
Surrey: Remember when Surrey houses were super affordable compared to most markets north of the Fraser River? Those were the days. In October, with 363 detached-house sales, the Surrey benchmark house price was $1,507,400, which is close to values in Burnaby and Coquitlam. Surrey house prices are now 32% higher than in October 2020. Townhouse benchmark prices, at $746,400, are up 26% for the year and 2.6% higher than in September. Benchmark apartment prices are now $462,200 in Surrey, but are rising an average of 1.6% per month. But note that, as in Greater Vancouver, active listings are down sharply from a year ago.