Metro Vancouver strengthened its status as one of Canada’s hottest housing markets in 2021, with record-breaking sales totals and home prices reaching all-time highs.
The Real Estate Board of Greater Vancouver (REBGV) recorded a total of 41,311 residential home transactions across all property types by the end of November, far exceeding the 30,944 properties that traded hands during 2020. The latest figures translate to an average of 3,755 sales per month in 2021, eclipsing last year’s monthly average of 2,578.
The seeds of Vancouver’s torrid sales pace were planted at the start of the pandemic. Uncertainty surrounding COVID-19 caused a slowdown in March 2020, but shifting housing needs and historically low interest rates ramped up real estate transactions during the second half of the year.
Demand remained high heading into 2021, although January’s sales total (2,389) turned out to be the lowest of the year by a significant margin, as no other month saw transactions dip below 3,100.
Vancouver home sales, listings spiked in the spring
A surge of spring activity saw sales peak at 5,708 in March, the highest monthly transaction total ever recorded in Metro Vancouver. Those record-setting numbers kicked off a three-month buying binge that saw 14,884 properties trade hands between March and June.
Sales were spurred by increased household savings resulting from pandemic lockdowns, as well as homeowners who saw their property values increase and looked to either move up in the market or relocate to suburban areas.
Listings also entered record-breaking territory during the spring, with homes hitting the market at a higher rate than Vancouver had ever seen before.
However, buyer demand swallowed up the new supply before it could accumulate. For example, Vancouver properties averaged less than 20 days on the market during the month of May, reflecting the region’s insatiable demand.
A summer lull saw both sales and listings recede after the spring frenzy, while fewer bidding wars caused prices to stabilize after surging during the first half of 2021. Sales totals hit an eight-month low in September (3,149) before rebounding in the fall, with unseasonably high activity causing prices to inch higher as the year comes to a close.
Vancouver’s average home price hits $1.2 million mark
At the start of 2021, the benchmark price for all property types in Metro Vancouver was $1,047,400. Prices have increased during each month of 2021, with the benchmark rising to $1,211,200 by December, representing a year-to-date increase of 14.6 per cent.
Looking at Metro Vancouver’s housing segments, single detached homes have attracted the lion’s share of both buyer demand and bidding wars during 2021. As of December, the average detached home price sits at $1.87 million, jumping 20.2 per cent from the start of the year.
Year-to-date, attached home prices have increased 21.6 per cent to reach an average of $990,300, while apartment homes hit a benchmark of $752,800 by December, representing an 11.2 per cent increase.
Apartments were the only Metro Vancouver housing segment to experience any softening during 2021, with benchmark prices dipping slightly in June ($736,900) and July ($735,100) before rebounding toward the end of the year.
Supply issues persist heading into 2022
While prices keep rising, inventory in the region has plummeted at the tail end of 2021, contributing to the tight housing market. As of December there were a total number of 7,144 homes listed on Metro Vancouver’s MLS system, a 35.7 per cent decrease compared to December 2020 (11,118).
Policy makers have been tasked with finding solutions to increase housing supply, although there aren’t any easy answers. According to REBGV economist Keith Stewart, “it’s critical that this supply crunch remains the focus for addressing the housing affordability challenges in our region.”
Interest rate hikes are expected to eventually ease demand, but Vancouver is in a unique situation because of its geographical constraints and steady population growth caused by both immigration and interprovincial migration. Those factors, as well as economic recovery and rising consumer confidence, should continue to motivate buyers and boost prices in the new year.
