Despite all of the curveballs the pandemic has thrown at the real estate industry, new home construction completions in Metro Vancouver have remained stable according to new insights from the Real Estate Board of Greater Vancouver.
In the board’s recently-published Q3-2021 Housing Overview, economist Keith Stewart stated that new housing supply has “held steady” across Metro Vancouver during the pandemic.
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According to the quarterly report, builders have been completing new construction projects that kicked off during the region’s pre-pandemic building boom. Purpose-built rental apartments have reported higher completion rates with the help of rental incentives from all levels of government. Although these incentives are changing the types of new homes being built, Stewart said that “ownership housing remains the largest proportion of homes being built today.”
However, new ownership apartment starts and completions have not increased alongside the strong price growth that was recorded during 2016 and 2017.
“In less supply-constrained markets, the price growth like we’ve experienced in Metro Vancouver over the last five years would lead to a matching surge in completions,” said Stewart’s report. “This supply response is sorely lacking in our housing market today.”
In the resale segment, Stewart noted that the market is settling down after setting a series of sales and listings records during the first half of 2021, particularly during March, which set an all-time record of 5,708 home sales and 8,287 new listings. A larger portion of today’s total home sales are also attributed to first-time and move-up buyers.
“The increasing correlation between sales and new listings over the pandemic is consistent with more buyers selling their current homes and purchasing other, typically larger, homes,” explained Stewart.
The MLS HPI benchmark set a new record of $1,176,600 in August for all housing types. Less sales have taken place since March’s market peak, causing price growth to plateau in the region throughout the summer. However, prices could expect to feel pressure come the fall as above-average sales volumes collide with low home inventory levels, Stewart noted.
The Lower Mainland’s job vacancy rate has returned to near pre-pandemic levels. However, Stewart explains that this rate is higher than other major economic areas in Canada, underscoring employment recruitment challenges that could be caused in part by the region’s high cost of housing.
Coming into the final chapter of 2021, Stewart says that new listings and sales are anticipated to stay closer to long-term averages as active listings slowly build throughout the fall and into the spring.
“Expect these gains to remain on the lower side of typical as Metro Vancouver’s housing market continues to face an under supply of homes and persistent demand pressures,” said Stewart.