The waiting game continues but some sellers are becoming impatient
The waiting game in the Metro Vancouver housing market continues but more sellers are joining in and some are becoming impatient. One month a trend does not make. But we certainly saw more listings come on the market in Metro Vancouver in September – more so in the first half. As September moved on through the second half of September, fewer listings came on than in the first half and perhaps this was a cloud burst of new listings and not a constant shower. Much like the rain in September that came in fits and starts, while we have more inventory, it’s still far short of what’s needed.
The wild card is the direction of interest rates and, to an extent, that of the provincial economy. In any case, the pot on the table is getting larger as September saw 5,564 new listings pushed into play, the highest number since May 2023 and nearly 30% higher than in September 2022. Meanwhile, 1,926 properties were sold this September, almost as low as September of 2022, with just 1,701 transactions last year. Today, with 11,382 active listings in Greater Vancouver and another 6,532 in the Fraser Valley – and the sales-to-listing ratio falling – we believe some sellers will tire of waiting. The question is just how many.
We can expect some asking prices to come down, especially in the detached-house sector. Arguably this has already happened.
Let’s look at the environment through a potential detached house seller’s lens. The unpopular Bank of Canada shouldn’t raise interest rates again at its October sitting. I doubt even the Governor of the BOC knows for sure what to do. Let’s hope they don’t fall for the increase in jobs reported today in Canada and base a rate increase on that number. The B.C. Finance Minister just released an economic outlook that forecasts provincial GDP growth shrinking to 0.4 percent next year. Consumer confidence is fragile. If the rate does increase, even by a modest 0.25 percent as it did in August, it would further drag down detached house sales that are already lagging. In September, the sales-to-active listing ratio for detached houses in Greater Vancouver fell to 12.6%, signalling a buyer’s market. The benchmark detached house price fell 0.1% from a month earlier and it hasn’t budged in three months.
Those eager to sell a detached house may decide to drop their asking price now because the demand for homes benchmarked at more than $2 million will shrink even further. On the bellwether Westside of Vancouver, for example, the average sale price of a detached house was $403,000 lower in September than in January 2023. This doesn’t mean prices fell by that much, but that the composition of sales was such that more homes for less money sold than in January. With the cost of borrowing, lower price points are more attractive.
Some owners have taken measures to hang onto their houses: 33.3% of Canadian mortgage holders now have amortization periods that exceed 30 years, some surpassing 40 years. A handful can’t hang on.
Buyers, therefore, should continue to search through the expanded listings of detached houses and prepare to be aggressive when making offers. There could be some true bargains out there as owners and investors grapple with higher mortgage rates and flatline prices. Right now, in most detached markets, buyers have the advantage.
For wily investors with deep pockets, the new blanket zoning of Vancouver residential lots for up to six housing units, including strata corporations, could also represent an opportunity. Warning: the city expects to allow only about 150 such applications annually.
However, those hoping that a surge in new home supply, as being pushed by both the province and the federal government, will lead to lower home costs could be disappointed.
In October Metro Vancouver, which represents 21 municipalities, plans to increase development cost charges (DCCs) on new residential construction to pay for water and sewage upgrades. The increases would occur every January over the next three years beginning in 2025. For the City of Vancouver and parts of Burnaby, DCCs on a single-detached home would increase 240 percent from $10,027 to $34,133. Townhomes will also see a significant increase – up 256 percent to $30,861 by 2027. New condo apartment fees will increase 235 percent, to $20,906, during the same period. Depending on the sub-region location, the proposed combined total DCCs rate increases to $24,106 per single-family lot, $22,182 per townhouse unit, and $14,657 per apartment unit. These charges would only apply to market housing, the kind most people want.
Summary of the regional numbers for September 2023
Greater Vancouver: The composite residential benchmark price hit $1,203,300 in September, which was a 0.4% decrease compared to the $1,208,400 in August, which was a decrease from the $1,210,700 benchmark in July. By property type, the benchmark price is now $2,017,100 for single-detached homes, $1,098,400 for townhouses, and $768,500 for condominiums, with all three representing decreases between 0.1% and 0.5% from August. All sectors are seeing sales increases of between 5.3% and 5.8% when compared to September 2022. Total units sold in September were 1,926, down from 2,296 (16%) in August, down 21% from July 2023 and down 35% in June 2023, but up from 13% compared to September 2022, but 18% lower than in pre-pandemic September 2019. Active Listings were at 11,382 at month-end compared to 10,424 at that time last year and 10,082 at the end of August. New Listings in September were up 38% compared to August 2023. The inventory of total residential listings is up to 6 month’s supply (balanced market conditions) and a sales-to-new-listings ratio of 35% compared to 57% in August 2023 and 39% in September 2022. The sales-to-active listings, though is 13%.
Vancouver Westside: This is considered the premier housing market in B.C., if not in Canada, but September held some surprises. With 1,155 new listings, the sales ratio is 29%, the lowest level since January 2023, and the number of active listings, at 3,225 at month’s end, was the highest since July of 2021. With just 338 sales in September, the sales ratio to active listings was just 13%, which is in a buyer’s market. The benchmark detached house price in September was $3,553,600, up 1% from a month earlier and 8% higher than a year ago. Townhouses are benchmarked at $1,457,900, down 2.7% from August 2023, while condos are benchmarked at $1,331,600, nearly unchanged for the past two months. This is a buyer’s market in all sectors with a 7-month supply and low absorption. The Westside is prime for purchase with the largest selection in almost two years.
Vancouver East Side: Detached house benchmark prices are up 10% from six months ago but have flatlined recently, up just 1% since the second quarter and down 0.8% from August to $1,898,100. More detached houses sold (68) on the East Side in September than in any other market except Richmond (74). With Vancouver’s recent density changes for single-family lots, we expect East Side detached sales to increase. Total home sales in September were 192, down 23% from August and lower than in June and July 2023. Active Listings were at 1,157 at month-end compared to 1,088 at that time last year and 1,013 at the end of August. The supply of total residential listings is up to 6 months and sales to listings ratio of 31% compared to 66% in August 2023 and 40% in September 2022. This is a balanced market leaning towards a buyer’s advantage.
North Vancouver: There is some evidence that condo apartment sales are waning but certainly not in North Vancouver, where they represent half of all sales in September. The 84 condo sales followed 85 transactions in August, compared with 57 in September 2022. The benchmark condo price has paused, however, at $811,900, over the past three months. This may reflect a surge in condo listings, with 213 added in September, nearly double that of a month before. The result is the sales-to-listing ratio fell to 39%, down from 74% a month earlier, and opening a buyer opportunity. North Vancouver’s total residential property sales in September were 169 up from 160 in August, and up 33% compared to September 2022. Total new listings were up 86% compared to August 2023 and 111% higher than in September 202. Aside from condos, this is considered a seller’s market, with a tight supply continuing in the townhouse and detached house sector.
West Vancouver: The provincial government is pushing West Vancouver to bring more than 1,400 new housing units to the market and wants 60% of them to be rentals, half at below-market rents. Patience will be needed. Only 2,885 homes have been built in the exclusive community over the past 10 years and half of these were detached houses that now sell at a median price of $3 million. Condo apartments benchmarked at $1,331,600 in September and the 3 townhouses that sold this month were priced at more than $1.4 million each. Some reprieve for those seeking affordable housing is that West Vancouver is now a buyer’s market with a 12-month supply of total listings (626) and a sales-to-listing ratio at a low 21% in September.
Richmond: More detached houses sold – 74 – in Richmond than in any other Greater Vancouver market in September, perhaps partially due to price increases pausing over the past three months at a benchmark of $2,179,100. There was also a greater selection as 179 new listings were added, up from 150 a month earlier. The sales-to-new-listing ratio for detached houses is 41% and it averages 43% for strata units. Though total residential sales in September were the lowest in three months, at 256, Richmond is considered a balanced market with a 5-month supply, and the benchmark price has held steady since the second quarter at $1,184,700.
Burnaby East: Total sales reached just 18 transactions in September, the lowest level since May and most benchmark prices have followed suit with detached houses down nearly 6% over the past three months to $1,861600 and condo prices down 0.5% to $796,200. Townhouse benchmarks, though, are up 7% in the same period to $913,900, reflecting the low inventory. Total residential listings are up to 5 month’s supply and sales to listings ratio of 37% compared to 82% in August 2023 and 63% in September 2022 in this balanced market.
Burnaby North: The home of the Amazing Brentwood and related high-rise towers has a strong condo sector, but prices have stabilized recently, with the condo benchmark September price at $746,000, virtually unchanged (- 1%) from three months ago. Detached houses are trading at $2,048,900, down 0.1% from August 2023. Total sales in September were 113, down compared to August and 34% below June of this year. Active listings were 561 at month-end compared to 431 at that time last year and 495 at the end of August, due to an 8% rise in new listings month-over-month in September. This is a balanced, market with a 5-month supply of listings and sales-to-listing ratio of 37%.
Burnaby South: The most expensive Burnaby sub-market, the benchmark detached house price in September dipped 2.3% from August to $2,197,100 in September, reflecting an overall 5% sales decline, month-over-month. The benchmark was down 1% from August but remains 6% higher than a year ago. With total sales of 126 in September and active listings reaching 518 after a 31% surge in new listings in September from August, this is seller’s market. There is just 4-months’ worth of inventory and the sales-to-listing ratio is a strong 45%.
New Westminster: Total sales have been tracking down since June and settled at 72 in September, still up from 67 transactions in September 2022. Townhouse benchmark prices increased 1.3% from August, to $971,900, with condo apartment prices up 0.4% to $661,900. Detached-house benchmarks dropped 3.1% from August to $1,538,000 but remain up 3.4% from a year ago.
A total of 72 properties sold in September and active listings slipped down slightly to 298 at month end, despite an 11% increase in new listings compared to a month earlier. This remains a seller’s marker with just a 4-month supply of inventory and a sales-to-listing ratio at a healthy 42%.
Coquitlam: Coquitlam is becoming one of the better markets in Metro, with September new listings up 49% from August 2023 and sales up 19% from a year earlier, with 170 transactions in September.
The sales-to-listing ratio is running at 38%, but this is considered a seller’s market due to a tight 4-month supply of listings, which totalled 697 at month’s end. The benchmark price has held steady for three months at $1,112,900 and the detached-house benchmark is also stable, up 2.3% from a year ago at $1,789,300 as of September.
Port Moody: Port Moody finally has new strata projects underway, welcome because the total inventory of listings in September was 185, down from 187 a year ago, while sales totalled 43 units. New listings increased 30% from August, however, and the sales-to-listing ratio is 43% in this seller’s market. Even with just a 4-month supply of inventory, the benchmark composite home price in September was down about 1% from three months earlier, at $1,125,600, but still the highest in the Tri-Cities market.
Port Coquitlam: With a composite benchmark of $958,600, Port Coquitlam is one of the more affordable sub-markets in Metro and prices have been slowly declining over the past three months, as in most areas. Detached house benchmarks were down 2.1% from August at $1,408,000. Total residential sales in September were down 4% from a month earlier at 65 transactions in this seller’s market.
There is a mere 3-month supply of listings – a total of 191 – and the sales-to-listing ratio of 47% is among the strongest in the region.
Pitt Meadows: With just two dozen sales in September, typical for Pitt Meadows, this is still considered a seller’s market because of the lack of listings – just 86 – and a sales success ratio of 45%.
The composite benchmark price is $958,600, down 0.2% over the past three months, but still 4.4% higher than in September 2022.
Maple Ridge: With 108 total sales in September, transactions have been tracking down for a year, dropping 10% from August, 24% compared to July and down 5% from September 2022. Prices have held firm, however, with the composite benchmark still 4% higher than a year ago at $999,600 and the detached house benchmark 5% higher on the year at $1,297,200. This is a balanced market leaning towards a buyer’s advantage, with a sales ratio of 31% and a 6-month supply of total listings.
Ladner: Total units sold in September were 26, up from 24 in August, the same as July 2023, and up from 20 in September 2022. A quiet market, with the composite benchmark price at $1,178,700, unchanged from August and up 7.8% from a year earlier. The action was in a 91% surge in new listings from August, bringing the total inventory to 117, but still only a 5-month supply in this mostly seller’s market, where the sales-to-listing ratio is running at 40%.
Tsawwassen: Plans are afoot to transform the aging Tsawwassen Town Centre Mall into a mixed-use development with hundreds of new strata homes. South Delta in general is on the cusp of growth with the approval of the Roberts Bank superport and work starting next year on the Massey Tunnel replacement. This could by why housing sales in September, at 42, were up 50% from August and 100% higher than in September of 2022, the biggest year-over-year increase in Metro Vancouver.
The benchmark detached house price jumped 3% from August to $1,594,500 and strata prices also edged up. New listings in September were up 37% compared to August 2023 and the sales-to-listings ratio hit 57% compared to 52% in August in this strong seller’s market.
Surrey: Detached house sales in Surrey in September were up 36% from a year earlier, but have been declining recently, dropping 3% from August 2023 to 170 transactions, while the benchmark price dipped 0.2% month-over-month to $1,671,900. Townhouse sales also reached 170 in September, but the benchmark price, at $883,500, was up 0.2% from August and 6% higher than a year earlier, based on 139 sales in September, down 27% from a month earlier, the benchmark condo price is $539,500, down 1% from August but 4% higher than year earlier. This reflects what is happening across the Fraser Valley. “With inventory levels continuing on a slow and steady rise, together with slow sales, what we are seeing is a more balanced market,” said Narinder Bains, chair of the Fraser Valley Real Estate Board.