The Greater Vancouver Area and the City of Vancouver itself have seen better times. Over the past six months, a lot has changed on the real estate market here. Vancouver is no longer one of the top ten cities, home prices have undergone a major moderation (“Home prices in Greater Vancouver have generally declined between three and five and a half per cent, depending on property type, since reaching a peak six months ago,” Eugen Klein, REBGV president confirms), and we’ve seen a substantial decline in the number of listed properties, as well as sales, even compared to the average of the past decade of real estate in Vancouver.
The MLS HPI® composite benchmark price for all residential properties in Greater Vancouver continues the declining trend with $596,900 in November. Compared to this time last year, the benchmark price fell by 1.7 per cent and compared to the peak benchmark index of $625,100 in May, there’s been a 4.5 per cent continuous decline as well. Fraser Valley Real Estate Board president Scott Olson agreed home buyers are adjusting their price range. But he pointed out that some areas outside Vancouver — such as Abbotsford, Delta, central Surrey and Cloverdale — have seen the benchmark price for a detached home go up.
Home Listings Fall Rapidly
The total number of homes listed for sale on the region’s MLS® reached 15,689, increasing by 13 per cent compared to last year’s results. This also represents 9.7 per cent drop in the activity compared to October 2012 and almost 3,000 properties less than in June, when the peak value reached was 18,493. New listings were 12.9 per cent below the ten-year November average of 3,168.
New listings for detached, attached, and apartment properties fell to 2,758 — a 14.4 per cent decline in growth compared to November 2011, when new listings amounted to 3,222. Compared to October this year, with 4,323 homes added to the MLS® in Greater Vancouver, the November numbers plunged down by 36.2 per cent.
Residential property sales of detached, attached, and apartment properties in the Greater Vancouver area reached 1,686 in November, a 28.6 per cent decline compared to the 2,360 sales in November 2011 and a 12.7 per cent fall compared to the 1,931 sales in October 2012. It’s obvious that the sales are far from picking up and likely to follow the declining trend of the past month.
Klein shared his view on the November home sellers market situation: “Home sellers appear more inclined to remove their properties from the market today rather than lower prices to sell their properties. On the other hand, buyers appear to be expecting prices to moderate.”
- Detached property sales on the MLS® (629 units) experienced a substantial 31.3 per cent fall compared to November 2011 (916) and another massive 40.1 per cent decline compared to November 2010 (1,050 units). The benchmark price fell by 5.5 per cent since the peak benchmark in May to to $914,500. The benchmark price of a detached home on the Westside Vancouver has declined 8.4 per cent while detached homes in Eastside Vancouver have experienced a raise of 0.5 per cent compared to last year’s stats.
- Apartment property sales (750) declined by 25 per cent compared to November 2011 (1,000) and 28.7 per cent compared to November 2010 (1,052). Since reaching a peak in May, the benchmark price for an apartment property in Greater Vancouver declined 3.9 per cent to $364,900. Since last year, the benchmark price for the Westside apartments fell by 1 per cent, whereas the price on for the Eastside has increased by 3.1 per cent.
- Attached property sales (307 units) - 30.9 per cent decline compared to November 2011 (444 units), and 24.6 per cent decrease compared to November 2010 (407 units). Since reaching a peak in April, the benchmark price for an attached property in Greater Vancouver has declined 3.6 per cent to $454,300.
On average, it takes 59 days to sell a home in the Metro Vancouver and Fraser Valley area — up five days from November 2011. Townhouses were on the market 70 days and apartments 74 days, according to the real estate board. The sales of the townhouses on the Eastside market grew by 16.67 per cent compared to the last year — the exact same value the Westside market numbers dropped. (Talk about coincidence.) The Eastside experienced a significant drop of all other stats, with a 31.68 per cent fall in apartments and a 18.75 decline in detached houses sales when compared to last year. The Westside didn’t hold out any better in November, falling 33.06 per cent in apartments and 36.36 per cent in detached house sales behind last years results.
Vancouver West average real estate prices returned to the level from February 2010. House average sale price fell down by 7 per cent from a year ago and $600,000 from the peak value in December 2011. Townhouse average sale price declined to $866,501, 0.7 per cent lower than a year ago and $200,000 than the April peak value. Vancouver condos raised to $600,946 (4 per cent from a year ago) but fell a little less than $100,000 from the peak value in February.
Expect Moderation in 2013
As the year leans to an end, we might expect the moderation of the market in the next couple of months. These predictions are mostly based on the not very positive outlook for global economic conditions and slowly disappearing effect of the 2010 and 2011 pre-sales. Mathieu Laberge, Deputy Chief Economist for the Canada Mortgage and Housing Corporation, says, “Nevertheless, employment growth and net migration will help support housing starts activity going forward.”
Canadian Imperial Bank of Commerce’s chief economist Avery Shenfeld has a positive outlook on the development in British Columbia:
“The rapid run-up in prices was one factor turning the province from a beneficiary of in-migration to a net source of emigration. Dreams of retiring in B.C., and taking one’s spending money to that province, might be back en vogue if relative prices of housing are better in line with other provinces.”