In Greater Vancouver, strong demand for condos continues to be met with limited supply, pushing up prices for what was at one time a more affordable home option. And this trend is expected to persist in the coming months.
In February, the benchmark price of a condo was $682,800, a 27.2 per cent increase from a year ago, according to the latest data from the Real Estate Board of Greater Vancouver (REBGV), published this month.
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“Prices do typically rise over the long-term. We have a lack of supply right now, particularly in the condo and townhome market which has caused a very high sales-to-active listing ratio on those,” REBGV President Jill Oudil tells BuzzBuzzNews.
Although demand remains strong, condo sales did experience a 7 per cent year-over-year decline last month.
Oudil attributes the drop to new mortgage regulations that began on January 1, which include a stress test for uninsured mortgages.
“Rising interest rates and stricter mortgage requirements have reduced home buyers’ purchasing power, particularly for those at the entry level of our market,” says Oudil, in a press release.
“Even still, the supply of apartment and townhome properties for sale today is unable to meet demand,” she adds.
As we enter what is traditionally Greater Vancouver’s busiest season for real estate activity, here are 8 more facts you should know about the condo market.
1. In February, a total of 1,185 condos changed hands in the region, down 7.1 per cent from 1,275 sales recorded a year ago.
2. Last month, there were 1,986 active condo listings in Greater Vancouver, compared to 2,253 listings in February 2017.
3. A condo was on the market for an average of 20 days in February, compared to 27 days for a townhouse and 44 days for detached homes.
4. The benchmark price of a condo in Greater Vancouver has increased nearly 83 per cent over the past 10 years.
5. In February, the sales-to-active listings ratio for condos was 59.7 per cent — the highest ratio out of all property types. REBGV says downward pressure on home prices occurs when the ratio falls below the 12 per cent mark for a prolonged period of time. Upward pressure on prices occurs when the ratio surpasses 20 per cent over several months.
6. According to Cameron Muir, chief economist at the British Columbia Real Estate Associate (BCREA), both the condo and townhouse segments are firmly in sellers’ market territory. “We see prices climbing at rates of 25 per cent to 30 per cent year-over-year growth in the apartment market in Metro Vancouver region,” Muir tells BuzzBuzzNews.
7. As condo and townhome prices are rising, REBGV’s Oudil says the price gap between those property types and detached prices has closed. Last month, the benchmark price of a single-family home was $1,602,000.
8. Across BC, the supply of homes continues to trend near decade lows, but residential construction activity is at a record level. BCREA says over 42,000 units — primarily multi-family homes — are in the pipeline in Metro Vancouver, up 56 per cent from construction levels in 2008.