As British Columbia continues to gradually lift lockdown restrictions, further insight into the economic impacts of the COVID-19 pandemic over recent months are becoming more apparent.
While average home prices appear to remain stable, sold prices of condominiums across the Greater Vancouver Area are showing signs of decline after the COVID-19 pandemic hit, according to a new market report released this week. The analysis, a collaboration between University of British Columbia professor and economist Thomas Davidoff, and Roomvu, a real estate marketing and analytics platform, details the drop in condo sale prices across the GVA compared to pre-pandemic levels.
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The report analyzes average pre-pandemic sold prices, from January 1st to March 14th, of one-bedroom and two-bedroom condos relative to property assessment values. Then, the data is compared against average post-pandemic sales prices, between March 15th and April 30th, also relative to property assessment values.
“Assessment value rises and falls based on all characteristics — sub-area trends, renovations, property attributes and market conditions, among others — that the difference between the sales price and the assessed value can become an excellent measure of a market’s activity,” said Sam Mehrbod, CEO of Roomvu and a Vancouver-based realtor.
Prior to the pandemic, sold prices for one-bedroom condos were higher than assessed values in nearly all markets across the GVA. Most condos of this type sold between 6 to 14 percent above their assessed values, with Coquitlam and Surrey producing some of the highest pre-COVID-19 percentages of 14 percent and 11 percent, respectively.
After March 15th, the amount that one-bedroom condos would sell for above their assessed value dropped, dipping between 3 percent to 10 percent. Condos in Port Coquitlam fell from 8 percent pre-COVID to 4 percent, and from 9 percent to 4 percent post-COVID on average in North Vancouver. New Westminster was the sub-region to experience a slight rise in sold prices above assessed values, with pre-COVID percentages increasing from 8 percent to 9 percent.
Graph: Percent differences between sales prices and assessment values before and after March 15 on one-bedroom GVA condos / Roomvu
“The difference isn’t massive but it does show that the market is slowly shifting,” noted Mehrbod in the report. “The market is starting to price in the impact of the Coronavirus.”
Two-bedroom condos experienced a similar percentage drop, but in fewer GVA cities. Vancouver units that sold for 7.5 percent above assessed value pre-COVID-19 dropped to 5 percent after March 15th. Meanwhile, in Coquitlam and Port Coquitlam, two-bedroom condos sold for 7 percent above assessed value on average, only to rise by half a point to 7.5 percent post-pandemic.
At the onset of the pandemic in mid-March, sales nosedived. However, sales activity in the lower-price points of the market have showed a stronger performance compared to properties in the higher end of the price spectrum — properties priced over the $1 million mark had a sales-to-new-listings ratio of 20 percent, while properties priced under $350,000 had a sales-to-new-listings-ratio of 54 percent. Typically prices increase when the ratio is higher over a sustained period. A lower ratio can indicate the opposite, with prices experiencing downward pressure as demand falls and supply increases.
“Conditions in the market appear to have changed less than one might have expected before and after the shutdown,” said Davidoff in the report. “We continue to see a very strong relationship between price point and sales performance, both in terms of sales to listings and price relative to assessment.”