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After a rocky 2019, Vancouver’s housing market prospects for 2020 are looking a whole lot rosier.
It took a significant amount of grinding through some challenging months to get to this point. Home sales dropped off a cliff, the new construction market spent some time in the wilderness and luxury home buying dried up almost entirely. These are just a few of the memorable events that 2019 treated us to — moments that many in the real estate industry will be happy to forget as the clock strikes midnight and the book closes on this difficult year for Vancouver’s housing market.
But 2020 looks to be the beginning of a new chapter for the Vancouver housing market and it’s one that most of us should be excited to start. The snapshot of the market at the end of 2019 is looking a whole lot more favourable than the dismal state we witnessed nearly 12 months ago.
“Sales have picked up significantly this fall and there is momentum in our market. Buyers who took a “wait and see” approach over the past 18 months are returning to the market looking to buy, confident that price drops have levelled off and may start to escalate,” said Randy Ryalls, Managing Broker, Royal LePage Sterling Realty, in a media release that accompanied the national brokerage’s Vancouver market outlook for 2020.
“We are seeing multiple offers for quality listings in high demand regions although not to the degree that we saw in 2016,” he continued.
In his assessment, Ryalls is in line with the market expert consensus that 2020 will be a continuation of the relatively modest momentum established in late 2019. By no means should anyone expect a return to the stratospheric sales activity and price gains experienced when the Vancouver market peaked in 2016.
Considering the already prohibitively expensive state of the Vancouver housing market, this will be welcome news for many. However, Ryalls is quick to add an important caveat.
The stubbornly low inventory levels caused by a lack of new listings hitting the market will also persist into 2020. Meantime, mortgage rates aren’t expected to increase substantially next year and the BC labour market has been strong. These market conditions mean prices will continue to climb at an accelerated rate as more buyers enter the market without adequate supply to meet this increase in demand.
“The concern for potential buyers may be that prices will escalate quickly but they should also be concerned that they won’t get the same selection of listings or time to look around,” said Ryalls.
For 2020, Royal LePage is projecting a 1.5 percent increase to the aggregate price of a Greater Vancouver home. If this comes to pass, the aggregate price will hit $1,125,000 by year end. The median price of a two-storey home is also projected to get a similar boost, with the brokerage predicting a 1.25 percent rise to $1,460,700. The price of an average condo is expected to rise 3 percent to $666,900 by the end of 2020.
