Vancouver’s housing market can’t seem to catch a break these days.
Market conditions were less than stellar for the West Coast city for most of 2019. The demand for new construction condominiums plummeted, with the number of units launched dropping by 60 percent compared to 2018. Then, there was the federal stress test and other government interventions, which, despite being implemented in early 2018, continued to have profound impacts on sales well into 2019.
Now with COVID-19 taking the world by storm, market conditions across the country are heading into uncharted territory.
Sotheby’s International Realty Canada struck an optimistic tone in a new report on the city’s luxury housing market, noting that Vancouver’s luxury condo market could still rise above the coronavirus crisis. The brokerage published their Top-Tier Spring Outlook Report for 2020 this week, highlighting recent sales activity in Canada’s luxury markets, along with predictions for what may be to come when the pandemic subsides.
Housing Market News Alerts
Sign up now for news alerts on the Vancouver housing market
Sotheby’s refrains from attributing any sales declines directly to the coronavirus’s spread, but disruptions caused by the pandemic may have had an impact on the first half of March’s sales performance in Vancouver, judging by preliminary data. For the first 15 days of March, Sotheby’s found that sales on all property types over the $1 million mark dropped by 19 percent, from 116 residences sold during this time in 2019, down to 94 in 2020.
In the condominium segment, sales over $1 million decreased by 46 percent, with only 20 units sold. Still, the report is confident that activity should pick up momentum once again once the pandemic passes, given that buyer demand will likely have just remained dormant, rather being erased entirely.
“As one of the world’s most coveted regions in terms of livability, the city is positioned to see continued activity through the spring and to regain significant momentum once the disruption passes,” Sotheby’s stated in the report.
During the first two months of 2020, Vancouver’s luxury market saw rising consumer demand as sellers and buyers, previously kept to the sidelines due to market uncertainty, jumped in. Bidding wars for condominiums and other property types returned, especially for properties below the $2 million mark, according to the report. Property sales for the $1 million-plus benchmark increased by 80 percent in January and February, for a total of 501 properties sold.
Condo sales activity and traffic overall saw a boost, particularly in the lower tier of the luxury market. Properties priced over $1 million saw a sales surge of 65 percent year-over-year, with 142 units sold in the first two months of 2020. Suites priced between the $1 million to $2 million range saw a 75 percent sales increase and a total of 121 units sold. Meanwhile, condos in the price bracket above — $2 million to $4 million — witnessed a modest 6 percent gain. Quadrupling last year’s numbers, four luxury condominiums sold for over $4 million in January and February in 2020, compared to only one unit during the same period in 2019.
In the new construction segment, there are currently 139 active condo developments, according to data from BuzzBuzzHome. With a median list sales price of $1,249,950, new Vancouver condos are typically going for $1,392 per square foot.
“The Toronto, Vancouver and Montreal real estate markets experienced bold gains in the first months of 2020,” said Don Kottick, President and CEO of Sotheby’s International Realty Canada in the report. “A shortage of listings inventory, pent-up consumer demand, and regional economic fundamentals position these markets for resilience in the months ahead.”