As reported by Jill Slattery of Global News
, real estate observer and Sauder School of Business (UBC) associate professor Thomas Davidoff said that over the past few months, warning signs such as declining sales volume, growing inventory, and rising vacancy have become more evident in Vancouver.
The city’s sales-to-listings also went down drastically on a year-over-year basis last month, from 86 to 49 per cent in East Vancouver and from 82 to 46 per cent in the western part of the city. Vancouver’s overall sales-to-listings ratio sat at 59 per cent as of June 2016, with MLS data showing 2,618 detached-home listings and only 1,555 sales.
These developments came in the wake of the CMHC’s statements earlier this year that it has found “strong evidence of overvaluation” in Vancouver’s housing segment. Last month, the benchmark price of detached homes in the Greater Vancouver area was at $1,561,500, and a property on the West Side can cost as much as $3,547,300.
Davidoff said that while a 59 per cent sales-to-listings ratio is not yet in “crash territory”, the trends are nonetheless alarming.
“When this ratio is high, buyers perceive poor options outside of bidding on a given home. There’s little reason to think that the next home they bid on will be a bargain. When the ratio is low, buyers can be picky, because if they don’t get the house in question they are likely to find another home available soon,” Davidoff explained.
“If we see inventory pile up, we should be concerned about a bust,” he added.
Initial signs of a possible housing bubble burst have started appearing in Vancouver’s overheated real estate market, according to an industry analyst.