You’d have to roll back the clock to 2001 to find a slower May for condo sales in the City of Vancouver.
Local realtor Steve Saretsky, also the founder of the Vancity Condo Guide, draws attention to the condo market’s disappointing performance last month in a recent blog post.
“We feel it is important to highlight condo sales were at an eighteen year low despite the growth in population and housing stock over this time period,” Saretsky writes.
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Just 473 condos changed hands this May in Vancouver, which boasts a population of 631,486, according to 2016 census data. The sales tally represents an 11-percent decline from the previous May.
“Further, mortgage rates have dropped considerably over the past couple of months yet sales remain sluggish which suggests buyers have cautiously moved to the sidelines,” he adds.
In fact, five-year fixed rates recently hit a two-year low, according to rate-comparison website RateHub.ca. Lower borrowing costs are generally supportive of housing demand, though you wouldn’t know it looking at Vancouver.
However, Saretsky notes that with 4.7 months of inventory — that’s how long all condo listings would take to sell out if the current pace of sales persisted and no new units arrived — the market is showing signs of balance. Towards the end of 2018, inventory was approaching the 10-month mark.
“Clearly something has to give, and this will really depend on inventory levels which are still quite low,” says Saretsky.
While condo prices are down, “they appear to have stabilized somewhat,” he adds. According to the Real Estate Board of Greater Vancouver, the benchmark price of a condo apartment was $664,200, down 7.3 percent annually and 0.5 shy of April’s level.
“June is shaping up to be an interesting month in the condo space,” Saretsky muses. “Some Developers have decided the risk isn’t worth the reward and we [are] seeing an increasing amount of projects being placed on the back burner,” he adds.