According to Jill Oudil, President of Real Estate Board of Greater Vancouver (REBGV), homebuyer activity returned to near record levels across the Metro Vancouver housing market in May.
To understand what’s going on, let’s look at four key indicators:
Realtors registered 4,364 sales in May 2017, a decrease of 8.5% from the 4,769 sales in May 2016, an all-time record, and an increase of 22.8% compared to April 2017 when 3,553 homes sold.
Last month’s sales were 23.7% above the 10-year May sales average and are the third highest-selling May on record.
Contrary to the May 2016 property market, demand for condominiums and townhomes is driving today’s activity. First-time buyers and people looking to downsize from their single-family homes are both competing for these two types of housing.
New listings for detached, attached and apartment properties in Metro Vancouver totalled 6,044 in May 2017. This represents a 3.9% decrease compared to the 6,289 units listed in May 2016 and a 23.2% increase compared to April 2017 when 4,907 homes were listed.
The month-over-month increase in new listings was led by detached homes at 27.1%, followed by apartments at 22.7% and townhomes at 14.1%.
Home buyers are beginning to have more selection to choose from in the detached market, but the number of condominiums for sale continues to decline
The benchmark price for all residential properties in Metro Vancouver is currently $967,500, an 8.8% increase over May 2016 and a 2.8% increase compared to April 2017.To understand the relationship between supply and demand, we look to the sales-to-active listings ratio.
Sales-to-Active Listings Ratio
The sales-to-active listings ratio across all residential categories is 53.4%. By property type, the ratio is 31% for detached homes, 76.1% for townhomes, and 94.6% for condominiums.
Generally, analysts say that downward pressure on home prices occurs when the ratio dips below the 12% mark for a sustained period, while home prices often experience upward pressure when it surpasses 20% over several months.
While sales are inching closer to the record-breaking pace of 2016, the market itself looks different. Sales last year were driven by demand for single-family homes. This year, it’s clear that townhomes and condominiums are leading the way
Sales of detached properties in May 2017 reached 1,548, a decrease of 17% from the 1,865 detached sales recorded in May 2016. The benchmark price for a detached property is $1,561,000. This represents a 3.1% increase over May 2016 and a 2.9% increase compared to April 2017.
Sales of apartment properties reached 2,025 in May 2017, a decrease of 5.8% compared to the 2,150 sales in May 2016. The benchmark price for an apartment property is $571,300. This represents a 17.8% increase over May 2016 and a 3.1% increase compared to April 2017.
Attached property sales in May 2017 totalled 791, an increase of 4.9% compared to the 754 sales in May 2016. The benchmark price for an attached property is $715,400. This represents a 13.1% increase over May 2016 and a 1.9% increase compared to April 2017.
With the dramatic turn of events in May, I foresee home prices continuing to increase throughout the summer market. Even though we saw a 23.2% increase in new home listings in May, demand for condominiums and townhomes will also continue to outstrip supply until we see even more new listings coming onto the market.
Real Estate Board of Greater Vancouver, “Market activity picks up in May”, accessed June 3, 2017, http://www.rebgv.org/news-statistics/market-activity-picks-may
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