Vancouver’s housing inventory keeps plummeting, leading industry experts to wonder how low supply levels can go.
Dexter Realty recently released its Mid-November Greater Vancouver Sales and Listing Report, reporting a total of 8,125 active listings in the region, a steep decline from 12,482 at this time last year and 11.4 per cent lower than mid-October (9,161).
The shallow supply levels have entered record-breaking territory, dipping below Dexter’s lowest historical figure for this time of year — 8,700 active listings in November 2003. Only 2,142 new listings have hit the market in November, down from 2,231 at the mid-point of October and 2,211 at the mid-point of November 2020.
“There continues to be a hesitation for sellers to come on the market as finding the next home when you sell continues to be the bigger challenge,” Dexter Realty partner and chief economist Kevin Skipworth stated in the report. “Those looking for detached homes don’t have the luxury of more product coming from developers. This is and will continue to be a dwindling stock.”
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Despite the supply issues, a recent influx of residents shows no signs of slowing down. The Canadian government reported 45,040 people were granted permanent residency nationwide during September, up 19 per cent from the previous month. Many of those newcomers are calling British Columbia home, as the province welcomed 8,300 new permanent residents in September, second only to Ontario (21,730).
But the west coast has become Canada’s hotspot for interprovincial migration. According to Statistics Canada, B.C. has welcomed 34,277 residents during 2020-21, outpacing every other province and posting the biggest gain since 1993-94.
Those figures reinforce Skipworth’s assessment that “real estate in Metro Vancouver isn’t like the Field of Dreams where it was ‘if you build it they will come,’ more so it is ‘we need to build it, they are here.’” They could also help explain why demand remains high in spite of the supply shortage.
Greater Vancouver has seen 1,582 properties sold to this point in November, down from 1,767 at the October’s mid-point but up slightly from 1,505 at this time last year. Dexter reported a sales-to-listings ratio of 74 per cent, compared to 79 per cent last month and 68 per cent at mid-month in November 2020.
“Demand is proving to continue to be strong despite less and less being available for buyers to search for,” said Skipworth, noting the supply crunch has extended to Vancouver’s suburban markets. “Areas with dwindling inventories are starting to see the effects of less sales as buyers simply cannot find enough to purchase.”
Port Coquitlam — home to more than 58,000 people — reports only 123 active listings, while Pitt Meadows, which serves approximately 18,000 people, currently has only 34 homes available for sale. Listings are also down noticeably in Burnaby, Richmond and New Westminster.
Meanwhile, it remains to be seen how the B.C. government’s plans to implement a cooling off period for home sales in 2022 will boost inventory.
“This will not increase supply; in fact, it will likely choke it as more properties will be under contract with less clarity as to whether the transaction will move forward,” said Skipworth. “And while there were some details released that there may be some kind of penalty if a buyer walks away during the cooling off period, this kind of legislation puts the advantage in the buyer’s favour.”