While it’s early days yet, Vancouver’s real estate market seems to be coming back to life.
July sales figures released by the Real Estate Board of Greater Vancouver revealed a 23.5% year-over-year increase, as regional residential home sales totalled 2,557, trumping last year’s 2,070. It also marked a 23.1% increase over the 2,077 home sales recorded in June 2019.
And while sales in July were 7.8% below the 10-year average for the month, Jason Turcotte, Cressey Development Group’s VP of development, notes the last decade has been an aberration.
“The 10-year averaged a number we will always struggle to meet because those were unprecedented 10 years,” he said. “I think the whole dynamic of the marketplace has changed in Vancouver, and what it shows us is that with ‘normal’ buying activity we see prices hold.”
Juxtaposed with a year ago, when nobody knew where the Vancouver market was headed, consumer confidence has returned to the market. As evidence, Turcotte points to the city’s single-family detached market.
“A year ago, the single-family market was virtually non-existent,” he said of the 32% year-over-year sales increase. “Now there’s reason to be cautiously optimistic because it’s a sign that comfort has returned to the market and we’re seeing ‘normal’ activity.”
The benchmark price for detached properties remains exorbitant at $1,417,000, however, it’s a 10.5% year-over-year decrease from July 2018 and a 0.5% drop from the previous month. Moreover, the Canada Mortgage and Housing Corporation just designated Vancouver’s housing market stability as moderate after being “highly vulnerable” for the past three years.
“When they talk about prices and affordability, it’s still very much in their red zone,” said Turcotte. “The reason the designation had to do with the slowing pace of sales and the slight reduction of pricing, but the latter alone wouldn’t have done it. It’s not an overheated marketplace where demand exceeds supply, which drives prices up at unprecedented levels. If we look at prices relative to local incomes, they’re still unaffordable and there’s no question we have to recognize we’re not only a local economy: we have global appeal with growth of high-income immigration. The strong demand here will, from a global interest perspective, keep prices high.”