After a record-breaking October, the Vancouver region’s housing market is set to continue its stellar run in November as the factors underpinning its strength are showing no signs of changing.
Writing in response to the Real Estate Board of Greater Vancouver’s October data published last week, Central 1 Credit Union Deputy Chief Economist Bryan Yu said that while high unemployment and uncertainty over the pandemic persist, low mortgage rates, high savings levels and steady incomes for higher earners have ensured the region’s market remains on a tear.
With mortgage rates not expected to meaningfully rise for months, or even years, Yu said that there are few signs of a change in trend for the market in November.
As has become increasingly common across major markets this year, detached homes and townhomes continue to substantially outperform high-rise condos on the sales volume and pricing fronts. Yu said that the former markets tightened further in October, resulting in “strong sellers’ market conditions.”
The economist did acknowledge the weakness observed in the condo market, but even here Yu sounded upbeat about a turnaround as the pandemic’s effects eventually subside.
“Relative weakness in the apartment condominium sector is expected to be temporary as borders re-open for students and substantially higher immigration targets for the coming three years which will drive both homeownership and rental demand,” Yu wrote.
The impact of 2020’s sharp drop in immigration on the future of the housing market has been a major area of concern, but the federal government’s recently announced annual immigration target increases appears to be soothing some of these worries.
While November is expected to post solid home sales figures, Yu said that activity will likely slow moving into the winter as pent-up demand is satisfied and the second wave of COVID-19 puts a damper on the market.
In a market update email last week, Dexter Realty Managing Partner Kevin Skipworth quipped that every month the end of the Vancouver market’s run is forecast, but it still has yet to materialize.
“Of course, as we go through a typical year of market cycles, November, December and January see activity slow down,” wrote Skipworth.
“While this hasn’t been a typical year, it is safe to assume we’ll see this trend playout for the next three months as we come off the highs we’ve experienced. This shouldn’t be surprising nor indicative of anything more,” he continued.
