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An economist with one of Canada’s biggest banks is doubling down on the prediction that Vancouver home values still have some steam left at a time when prices are down 2 per cent in three months.
“[Vancouver’s sales-to-new-listings ratio] suggests prices are going to go up at a steady kind of clip,” Marc Desormeaux, a provincial economist at Scotiabank Economics, tells Livabl.
The increases will amount to “modest near-term home price gains,” Desormeaux previously stated in Scotiabank’s latest Housing News Flash.
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In September, Greater Vancouver’s sales-to-new listings ratio clocked in at 42 per cent, on a seasonally adjusted basis. The ratio, though still in balanced territory, has not been that close to a seller’s market since 2013.
Generally, the Canadian Real Estate Association considers a sales-to-new listings ratio between 40 to 60 per cent to reflect a balanced market. Ratios above that range suggest a seller’s market, while ratios below that range indicate a buyer’s market.
However, Desormeaux says that “demand factors are quite strong” in Vancouver and this should support further price gains.
These factors include immigration levels, an economy that “is performing relatively well,” and job creation.
“Add to that the fact that the market is under-supplied. We would expect prices to continue to rise despite some of the slowing that we’ve seen of late,” Desormeaux explains.
Much has been said about the recent rebound of the housing market in the Greater Toronto Area, where detached-home prices were higher in Q2 this year than they were in the first quarter in 75 per cent of neighbourhoods, RE/MAX INTEGRA notes.
The Scotiabank economist’s views on the west-coast housing market are at odds with some others.
Of late both Capital Economics and Central 1 have released reports in which the respective firms anticipate Vancouver home values have another 5 per cent to decline before they hit bottom.