Balanced market seen holding this summer
June housing sales in Greater Vancouver were down 11.4% from May to the lowest level since January this year as the market wilted in the record-setting heat. Yet, with 3,842 transactions in the month, it remained the eighth-highest June on record in Greater Vancouver.
More telling, perhaps, is the direction of prices, which increased just 0.2 per cent from May, the lowest month-over-month increase in at least a year. As June ended, the composite price of all homes sold in Greater Vancouver was $1,175,100. The value of detached houses sold was unchanged from a month earlier at $1,801,000.
But sharp eyes will notice an anomaly: outlying markets that had been posting the highest year-over-year price increases reported the biggest month-over-month decline in detached house prices in June.
Detached house prices on Bowen Island, which had soared 34% annually as of May, posted a 0.9% price decline in June compared to May. Whistler, where prices had jumped 38% from a year earlier, had prices drop 1.8% in June from a month earlier. Ladner prices fell 0.6% from May to June, after seeing an annual acceleration of 27%.
Across the Fraser Valley, total sales fell 24% from May to June and the average detached house price dropped by 4% month-over-month.
Meanwhile on Vancouver’s West Side – the epicenter of B.C. urbanity – the benchmark price of a detached house increased 2.2 per cent in June from May, the highest increase in Greater Vancouver.
We don’t think this is surprising, or a short-term trend. September is expected to welcome in the fourth and final phase of B.C.’s post-pandemic reopening. This means international borders will open, all businesses will be back in action and thousands of workers will return to the office. The big city will look increasingly tempting as hockey games open to crowds, major concerts tune up and Vancouver’s restaurants, pubs and theatres are open for business.
Expect to see home sales and prices, not just in Vancouver but across the entire region, continue to increase. The reason is quite simply the undeniable law of supply of demand.
From 2010 to 2020, B.C.’s population increased by 737,206 while only 316,510 housing units were built. In 2020, just 39,000 housing units were completed in B.C., up just 3% from 2019.
Some catch-up is taking place. In the first five months of this year, Metro Vancouver new home registrations were up 69% compared to the same period in 2020. About 18,000 new non-rental homes were registered in Metro Vancouver so far this year.
Still, with resale home sales averaging more than 4,000 per month and 50% of new-multi-family strata projects selling out – a pace of around 2,800 per month – supply is barely keeping pace with demand. In fact, the number of active listings in June were down 1% from a month earlier and new listings down 18% compared to May.
The number of Metro Vancouver properties sold in the first six months of the year is the second highest on record, just below the first half of 2016. Without a substantial supply in homes available, that demand continues to create pressure on prices.
The revised mortgage “stress test” rules came into place June 1, but with multiple offers still significantly occurring below $1 million, the effects of this change don’t seem to have had much effect. Demand is strong at the lower price levels and the continued lack of homes available for sale will continue to create an extremely competitive landscape.
And remember, you only have to qualify for the stress test 5.25% mortgage rate, not pay it.
Right now, it is possible to secure a five-year variable mortgage at 0.99%, perhaps the lowest rate in Canadian history.
While this summer is likely to lead to less activity in the real estate market, it will provide opportunity. Sellers should consider listing during this time as there will be less new listings compared to the last four months, and buyers that are looking will likely be serious. With the Real Estate Council of BC and the Superintendent of Real Estate consenting to open houses and in-person showings again, access to homes will be also much easier.
Metro Vancouver June highlights:
• Highest detached house price increase from May: West Vancouver, up 3.4%
• Highest condominium price increase from May: Maple Ridge, up 3%
• Biggest decrease in detached house sales from May: Surrey, down 29.8%
• Lowest price detached houses in June: Sunshine Coast, at $838,300
• Highest price detached house in June: Vancouver’s West Side, at $3.38 million
• Top small market for investors to watch: Ladner
Vancouver Westside: Total West Side housing sales in June, at 616 transactions, were down 16% from May, but 51% higher than in June 2020. New Listings in June were down 13% compared to May 2021, yet up 10% compared to June 2020. The result is a 48% sales-to-new-listing ratio, and a subsequent price increase. In June the benchmark West Side detached house price, for example, was $3,458,300, up 16.3% from a year earlier and 2.2% higher – that is $76,000 – than a month earlier. The total current inventory of residential listings is steady at a four month’s supply, signaling a continued seller’s market. Condo investors should note that West Side apartment prices have not budged much in two months and are now less expensive, at $831,200, than they were three years ago, while average rents have increased.
Vancouver East Side: The East Side of Vancouver continues as a hot market, with June sales up 5% from May, to 451, a 61% increase from June 2020. New listings dropped to just 1,071 homes, down 17% from a year ago. The composite benchmark home price was down 0.2% from May and the detached house price fell 0.8%,month-over-month to $1,695,500. There is now a 3-month supply of listings on the East Side market and the sales-to-listing ratio is 66%, one of the strongest levels in Metro Vancouver. With prices moderating this summer despite the healthy sales, buyers may want to take advantage.
North Vancouver: North Vancouver saw listings of homes for sale drop 21% in June from a month earlier. June sale transactions fell 10% from May, to 322, and composite benchmark prices was up just 0.6 per cent from a month earlier, to $1,123,800, with detached houses also virtually unchanged at $1,914,000. On the resale market, there is about a 2-month supply of homes for sale, and the sales to listing ratio is 70%, signalling a seller’s market. There are 33 new condo projects and 25 townhouse developments underway across North Vancouver City and District, so future supply, albeit more expensive, is coming.
West Vancouver: West Vancouver is primarily a detached house market, so city proposals that would reduce the size of new houses and at the same time allow coach houses and secondary suites are worth watching. Plans call for the floor-space ratio on large lots reduced from 0.35 to 0.30, with a maximum of 2,200 square feet of house allowed on smaller lots. However, the city is also considering allowing an 800-square foot ‘bonus’ for a separate coach house (or laneway house) and 500 square feet for a secondary suite. The bonus would also be applied on lots with homes built prior to 1976, provided that the original house is retained. The new rules, if all approved, would come in January of 2022. Meanwhile, there was little change in West Vancouver’s housing market in June: sales were down 1% from May and active listings dropped by just 7 homes from a month earlier. West Vancouver’s detached house price is now $3,152,500, up just 0.4% from May, but 21.5% higher than in June 2020.
Richmond: You may not notice because of the construction dust coming from 1,000 new multi-family homes being built at the Richmond Centre shopping centre site, but Richmond housing sales dipped 7% in June from a month earlier, to 472 transactions, and new listings were down 15%, month-over-month. The sales-to-listing ratio is a healthy 66%, however, which keeps this a seller’s market. Richmond is considered a major destination for foreign buyers and new immigrants so the expected opening of international borders by this September is reason for confidence for home sellers and developers. The June detached house price in Richmond was unchanged from May at $1,910,500, but up almost 20% from a year earlier.
Ladner: A game-changing decision is expected “shortly”, 16 months after the federal government said funding is available for either an eight-lane new tunnel or an eight-lane bridge to replace the aging Massey Tunnel. When approved the decision could have a profound effect on Ladner property values. Ladner is a small market – just 52 home sales and 100 active listings in June – but developers and the local council apparently have big plans for the waterfront community. Buyers do too. In June, Ladner’s sales-to-listing ratio was 98%. I humbly suggest that Ladner may the prime sleeper market in Metro Vancouver.
Tsawwassen: Total June housing sales in Tsawwassen reached 70, down 26% from May but up 100% from June of last year. Active Listings were 185, compared to 270 at that time in 2020, and 182 at the end of May; New listings in June were down 22% compared to May 2021 and down 14% compared to June 2020. This remains a strong seller’s market, with a sales-to-listings ratio of 70% compared to 74% in May.
Burnaby East: Burnaby East, like many areas, saw housing sales decline in June, dropping 8% from May to just 49 total sales. What is different here is that the sales-to-listing ratio is a scorching 89%, as new listings dropped nearly 30%. There is only a 2-month supply of homes for sale if the current trends continue. The benchmark house price in East Burnaby is now $1,440,000, down 2% from May, the biggest month-over-month drop and the lowest house price in Burnaby.
Burnaby North: The next phase of what will be 13 new residential towers at the Amazing Burnaby site in North Burnaby goes to public hearing June 29, so this area will apparently continue to see a good supply of strata product. This is welcomed because new listings of existing homes for sale fell 21% in June compared to May and there was only 519 active listings in June compared to 215 sales. The sales-to-listing ratio is 70% so there is no shortage of demand in what is a strong seller’s market.
Burnaby South: Townhouse buyers looking for value should consider South Burnaby, which borders three municipalities and has lower townhouse prices than any of them. In June, the typical South Burnaby townhouse sold for $702,200. This is $300,000 less than in East Vancouver; $223,000 less than in Richmond; and $120,000 below the benchmark price in New Westminster. Also, Burnaby South townhouse prices are up just 8% from a year ago, compared to double-digit increases in its three neighbouring municipalities. Burnaby South also has Burnaby’s lowest priced detached houses and condo apartments. This may help explain why Burnaby South total home sales posted the smallest sales decline of all Burnaby markets in June, down 6% from May.
New Westminster: The Royal City is becoming a condo market, seen in the tower construction on the Quay and the sales performance so for this year, which has seen 702 condo apartments sell, up from 340 at the same time last year. Of the 154 total residential sales in June in New Westminster, 106 were condos, which sold for a median price of less than $550,000, the second-lowest price in Greater Vancouver. A key reason is that younger buyers have embraced New West. A recent national survey ranked New Westminster as the No. 1 B.C. city for Millennial home buyers. There is only a 2-month supply of all types of homes in New Westminster, however, as 61 per cent of listings sold in June. If you want to get into the New West action, you may want to get moving.
Coquitlam: Coquitlam, where the mayor is the former president of the B.C. homebuilders association, is doing a lot of little things right and big things brilliantly. Coquitlam was an early adapter of smaller lots and laneway houses.
Its giant Burke Mountain residential community is a huge success, its multi-faceted development at SkyTrain-linked Coquitlam Centre is forging ahead with major partners and now the city has plans for a rural-type subdivision in its Hazel-Coy area along the Coquitlam River. Details to be announced later this year, but plans call for 950 new homes over 100 acres. Coquitlam home sales were 329 in June, up 52% from June 2020, even though active listings were down 12% in the same period. The sales-to-listing ratio is 72%, an indication that many buyers are eager to buy into Coquitlam’s vision.
Port Moody: Port Moody appears to have more interest in approving rental apartments than strata projects, but the condos being developed are increasingly sophisticated: one will boast a waterfall, another a day care; another with Inlet views from a rooftop patio. Most Port Moody condos are fairly new, dating to just before and after the arrival of SkyTrain. This explains the current median condo price of $680,000, the highest in the Tri-Cities. Still, 263 condos have sold in the city in the past six months, more than double the number in the first half of 2020. The entire housing market is solid, with sales of 95 units in June, up 50% from June 2020, and a sales-to-listing ratio of 62%.
Port Coquitlam: The biggest residential development planned for Port Coquitlam is social housing, but buyers can also find comfort here, with median condo prices at under $500,000 and both detached houses and townhouse prices the lowest in the Tri-Cities. Comfort is appealing: the sales to listing ratio in June was 84%, the highest in the Tri-Cities and among the top in Greater Vancouver. Port Coquitlam is in close proximity to the giant Coquitlam Centre development, but at lower cost.
Pitt Meadows: Like many more rural markets, Pitt Meadow saw a sharp drop in total residential sales in June, with transactions dropping 19% from May to just 44 units. New Listings in June were down 6% compared to May 2021. Month’s supply of total residential listings is steady at 1-month’s supply, but the strong sellers’ market is a bit muted, with 73% of new listings selling in June, down from 84% in May.
Maple Ridge: Affordable, growing Maple Ridge saw 244 home sales in June, down 15% from May but 85% higher than in June 2020. The benchmark composite home price is $996,800, up 27.5% from year ago, but virtually unchanged from May at among the lowest in Greater Vancouver. Condo prices dipped 0.4% from May to $428,400 in June, the lowest in the entire region. Seller’s market conditions continue, with a sales-to-listing ratio at a startling 89% in June. With just 383 active listings on the market, prices will likely increase this summer.
Surrey: The second-largest city in the Lower Mainland saw price increases cooling in June, with average house prices, which had soared 27% from a year earlier, eking out a 0.5% increase from May to $1,511,707 in June. Sales of detached houses plunged 29.8% from May, to 421, however, an indication that the cooling may become a chill. Townhouse transactions, down 19.5% month-over-month, and condo apartment sales, down 25.3% from May, followed the downward trend. The average Surrey townhouse price in June was $747,256, while the average condo sold for $468,319, with both prices down fractionally from May.