Business shutdowns, social distancing and economic upheaval converged in April to hit the Vancouver region with a nearly 40 percent drop in home sales.
There were 1,109 homes sold in Greater Vancouver last month, a 39.4 percent drop when compared to activity a year ago, according to data released today by the region’s real estate board.
Though a significant decline in homebuying activity was already observed in the second half of March, April was the first full month that the housing market had to contend with the strict measures introduced to combat the spread of COVID-19. REBGV also reported that April sales dropped 56.1 percent when compared to March’s total and were 62.7 percent lower than the 10-year average for the month.
Activity in April 2019 was generally viewed as depressed by historic standards for the market, so rather than relying entirely on year-over-year comparisons, looking at activity in the months preceding the pandemic reveals the scale of the drop and how swiftly the momentum driving the market toward a busy spring was stopped in its tracks.
REBGV’s president-elect Colette Gerber struck an optimistic tone in a media release that accompanied the April data.
“Predictably, the number of home sales and listings declined in April given the physical distancing measures in place. People are, however, adapting,” said Gerber.
“We’re seeing more innovation in today’s market, with Realtors using different technology to showcase homes virtually, assess neighbourhood amenities with their clients and handle paperwork electronically,” she continued.
Gerber also highlighted that despite the massive decline in sales — the lowest total for April since 1982 — home prices remain stable.
“Home prices have held relatively steady in our region since the COVID-19 situation worsened in March,” she said.
The MLS Home Price Index for all properties in Metro Vancouver stood at $1,036,000 in April, a 2.5 percent increase over the previous year and a 0.2 percent increase over March. All property types tracked by the board — single-detached, attached and condo apartments — saw their benchmark prices increase both over the previous year and March.
To get a sense of where prices are headed for the near term, experts look to the sales-to-active listings ratio which acts as a gauge for supply (listings) and demand (sales) in a given period of time. According to REBGV’s data, the ratio was 11.8 percent in April, a substantial drop from March’s reading of 26.3 percent.
“Generally, analysts say downward pressure on home prices occurs when the ratio dips below 12 per cent for a sustained period, while home prices often experience upward pressure when it surpasses 20 per cent over several months,” the REBGV release reads.
The ratio had been climbing in the early months of the year before April’s decline.
