Vancouver real estate: Where are the opportunities in 2019?
For the Greater Vancouver real estate market, 2018 saw a dampening of the record-breaking sales volume and price growth we had been seeing in recent years. Interest rate hikes, the foreign buyers tax, and a new mortgage stress test that were introduced this past year, contributed to the softening we saw across all property types. Sales volume was down while inventory of residential listings was up.
Here’s a breakdown of what happened in 2018 for different property types: detached homes, townhomes, and condos. As you read below, remember that analysts say that downward pressure on home prices occurs when the sales-to-active listings ratio dips below the 12% mark for a sustained period (creating a buyer’s market) while home prices experience upward pressure when it surpasses 20% over several months (creating a seller’s market).
In December 2018, the benchmark price for a single family detached home in Greater Vancouver was $1,479,000. That’s down 7.8% compared to one year previous. You need only compare that to previous years, when annual double-digit percentage gains were common, to gain perspective.
The single family detached home market sits squarely in a buyer’s market. This may be a good time to purchase a single family detached home. Generally, it’s far more affordable now than has been in the recent past, and there is more inventory from which to choose.
If you’re a seller who wants to sell now, there is good news. If you purchased three or more years ago, you’ll likely sell for more than you purchased even if prices have softened. But strategically setting your list price is key—getting the expertise of your realtor is really important here.
In Greater Vancouver, the benchmark price of townhomes was $809,700, which is up 1.3% compared to one year ago. Based on the statistics from December 2018, the sales-to-active listings ratio was 12% for townhomes.
Of all property types, generally when you look at statistics over the past several years, condos have seen the highest percentage price gains even though the price gain comparing this past year to the year before was modest. December 2018 statistics show condo prices increased 0.6% when compared to the same time last year. Based on the statistics from December 2018, the sales-to-active listings ratio is 14.2% for condos
So the real estate market in Greater Vancouver region has definitely turned away from being a hot seller’s market with multiple, no-subject offers and overcrowded open houses. This is a great opportunity for buyers. You’ll see softening prices, higher inventory, less competition, and you’ll have more time to make your decision and to do your due diligence. Historically, real estate in Vancouver has been an investment (whether you plan to live in your home or hold it strictly as an investment property) that has helped owners build significant equity over the long term.
No one can say for certain where 2019 will take the real estate market. Some predict prices will continue to decrease. Still others say home prices will still increase (but perhaps more modestly than in previous years)—after all, Vancouver consistently ranks among the top cities in which to live. It’s hard to say. The market can be affected by so many factors.
Ahead of spring, which is can be a very busy time for real estate transactions, you may want to see if there’s an opportunity for you. Let’s chat—contact me anytime!