Following suit with previous months, housing demand is still continuing to outpace supply. In May 2017, MLS® recorded a total of 12,402 residential unit sales and an average MLS® residential price in BC of $752,536 which is a 7.9% decrease and 4.2% increase, respectively, from the same period last year. Total sales dollar volume amounted to $9.33 Billion which is a 4% decrease from May 2016. 

“Market conditions have tightened considerably this spring as an upturn in consumer demand has not been accompanied by a rise in homes listed for sale,” said Cameron Muir, BCREA Chief Economist. “The supply of homes for sale in the province has fallen 50 per cent over the past five years.

There is a shortage of housing supply in the entire southern portion which consequently results in upward pressure on home prices. Total active listings has decreased by 11.1% in comparison to May 2016 and totals 28,404 units. The ratio of home sales to active listings was over 20% in 9 of the province's 11 real estate boards and over 50% in Vancouver, the Fraser Valley, Chilliwack and Victoria.

Below you will find a comparative chart showing May 2017 and May 2016 figures for average residential price, active listings, sales-to-active listings, dollar volume and residential units sold in BC. (Click to enlarge photo).

For all your real estate needs, contact Amalia Liapis at 604-618-7000 or alternatively at amalia@wesellvancouver.ca.

The British Columbia Real Estate Association (BCREA) saw a 23.9% decrease in residential unit sales in comparison from April 2016 to April 2017 (9,865 units recorded by MLS®). Comparing to the same period last year, total sales dollar volume was $7.19 Billion which is a 25.4% decrease and the average MLS® residential price in BC has seen a 2% bringing it down to $728,955.

“BC home sales are on an upward trend this spring, led by a sharp increase in consumer demand in the Lower Mainland,” said Cameron Muir, BCREA Chief Economist.  

Home inventories are at a 20-year low. Currently, the seasonally adjusted annual rate (SAAR) of home sales has seen a significant increase in relation to the five-year SAAR for April. (89,000 to 106,000 units). SAAR is a rate adjustment that attempts to remove seasonal variations in the data.

There was a 17% decrease in the supply of homes available for sale in comparison to April 2016 figures. Adjusted for seasonal variations, active residential listings have seen a 50% decline since 2012 and are now at their lowest level in over 20 years. Due to the imbalance between supply and demand, demand is driving home prices higher in most regions.

Year-to-date, BC residential sales dollar volume was down 31.8 per cent to $21.3 billion, when compared with the same period in 2016. Residential unit sales declined 25.0 per cent to 30,757 units, while the average MLS® residential price was down 9.2 per cent to $692,220.

Source: British Columbia Real Estate Association (BCREA)

Join us as we dive into the residential sales statistics for the month of May. There has been a record number of sales of 13,458 residential units which is a 32.3% increase from May 2015 and a 3.77% increase from April 2016. The total sales dollar volume shot up by 51.1% compared to the same period last year to $9.72 Billion. In relation to the average MLS® residential price in BC, it increased 14.2% year-over-year to $722,146.

"Record housing demand and dwindling inventories are continuing to push home prices higher in most BC regions," said Cameron Muir, BCREA Chief Economist. "Total active residential listings across the province are nearly 30 per cent lower than twelve months ago."

"New home construction activity is at a near record pace in the province," added Muir. "Once the current crop of homes are ready for occupancy there will likely be more selection for home buyers and less upward pressure on home prices."

As a result of the ongoing trend of demand outpacing supply, there are a record number of homes under construction in the Metro Vancouver market. The BC residential sales dollar volume on a year-to-date basis has jumped to $41 Billion which is an increase of 62% in relation to the same period in 2015. The residential unit sales increased by 35.2% to 54,455 units and the average MLS® residential price increased by 19% to $752,105.

Take a look below for a regional breakdown of MLS comparative data and the changes from May 2015 to May 2016. 

Source: British Columbia Real Estate Association (BCREA)

For all your real estate needs, contact Amalia Liapis by e-mail at amalia@wesellvancouver.ca or alternatively by phone at 604-618-7000.

It's no surprise that the ongoing trend of housing demand outpacing supply has followed us into the month of May. Let's look back at April 2016 statistics to solidify our understanding of the housing market. 

There has been an increase of 30.3% residential unit sales when comparing April 2016 to April 2015 with a total of 12,969 units recorded. The total sales dollar volume was $9.64 Billion which is a 52.7% increase compared to the same period in time last year. Looking at the average MLS® residential price in BC of $743,640 shows a year-over-year increase of 17.2%. 

“Housing demand is exceptionally strong across the southern regions of the province,” said Cameron Muir, BCREA Chief Economist. “Consumers appear to be particularly active in the Vancouver Island, the Fraser Valley and the Thompson/Okanagan regions.” “Strong employment growth is helping underpin consumer confidence,” added Muir. 

Despite what appears to be a period of higher than normal unemployment, there has been an additional 78,000 workers employed in BC in the first quarter of 2016 which is a 3.5% increase in comparison to the same period last year. Looking at the year-to-date statistics, the BC residential sales dollar volume is sitting at $31.2 Billion (64.3% increase), unit sales total 28,028 units (36.2% increase) and the average MLS® residential price is currently $761,860 (20.6% increase). Take a look below for a regional breakdown of MLS comparative data and the changes from April 2015 to April 2016. 

Source: British Columbia Real Estate Association (BCREA)

For all your real estate needs, contact Amalia Liapis by e-mail at amalia@wesellvancouver.ca or alternatively by phone at 604-618-7000.

From a macro perspective, Canada's economy is going through a rough patch and growth is slowing down. Several variables contribute to this such as the equity markets being off to a historically bad start, the weak Canadian dollar and the oil prices struggling to find a floor. On the bright side, looking at BC's economy allows us to let out a bit of a sigh of relief. There seems to be a multitude of indicators that provide British Columbians with a glimmer of hope as these indicators point to significant momentum underlying our provincial economy.

The pace in which consumer spending and retail sales grew last year was the fastest pace in close to a decade. This key indicator proved to be the largest component of BC's economy. As a result of this, this growth largely reflected markedly improved labour market fundamentals. While employment growth has seen sluggish growth for the past few years, the last six months of 2015 proved to be a stark contrast. Growth was moving at more than a 2% rate over the latter half of the previous year. Full-time employment seeing an increase was the driver spearheading the growth seen.

With the growth demonstrated, it is no surprise that British Columbians were in a spending mood. Not only did consumption goods see an increase in sales but larger paychques and confidence in the BC economy resulted in the third highest year on record for provincial home sales. With the relative strength of the economy in BC, it is no wonder why we are seeing more interprovincial migration with workers moving to BC. Since 2013, there has been a net inflow of more than 30,000 people from other provinces, resulting in population growth and adding to an already strong housing and consumer demand.

With a strong housing demand comes a record low supply of re-sale and new housing in BC. Developers reacted to this lack of supply by breaking ground on over 30,000 new housing units last year making it the highest number of housing starts since 2008. All in all, BC's economy is forecasted to continue being a growth leader in Canada for this year and the years to come.

Source: BCREA Economics - Brendon Ogmundson

With the booming real estate market in Vancouver, it is no doubt that prices have appreciated due to the high demand. What's interesting is the asymmetrical price appreciation seen in the housing market. More expensive properties are seeing prices rise at a faster rate than those of their less expensive counterparts. Price gaps seen between houses, condominiums and detached homes are beginning to widen with Vancouver leading the biggest home price gap increases within Canada. This could be the result of foreign investment activity in Vancouver, especially within the luxury market segment. Housing priced in the higher end of the spectrum are more vulnerable to price adjustments.

The asymmetrical price appreciation has been evident in Vancouver for the past ten years which is predominantly caused by the rapid price increase of luxury homes. Housing prices have seen an overall increase, however, luxury home prices are leading the pack with the rate of increase nearly quadrupling the rates of those in the lower end of the spectrum. Homeowners within the move up market are primarily affected by this asymmetry. This phenomenon is limiting the ability for homeowners to "move up" into a bigger home and is even affecting first-time homeowners as well.

As a result of the inability to move up, homeowners are beginning to invest more in renovations as it is seen to be a more cost effective measure. Stay tuned for our next blog which tackles the issue of how to renovate your home while remaining on budget. For all your real estate needs, contact Amalia Liapis at amalia@wesellvancouver.ca or alternatively at 604-618-7000.

In this blog, we'll be touching base again on the demand for housing in the Greater Vancouver Region. As stated in the previous blog, the demand for housing has slightly outpaced the supply for it. In addition, we will be delving into the current status of the real estate market.

The real estate market is cyclical in which several factors such as interest rates, employment growth, investment growth, construction and immigration influence this cycle. These factors affect whether it is a buyer's, seller's or balanced market.

[1] A buyer's market is when the housing supply is greater than the demand. This generally results in housing prices dropping over a period of time due to the fact that home owners may be eager to sell their property.

[2] On the other end of the spectrum is the seller's market. It is when interest rates are low so there are many qualified buyers but not many homes for sale. In this case, buyers must make quick decisions in order to secure a property due to the housing scarcity. Buyers also face competition with multiple offers on the home they are interested in buying and consequently, housing prices may rise.

[3] Lastly, a balanced market is where there supply and demand are fairly equal to one another (not necessarily at equilibrium though). 

Ray Harris stated, "[o]ur market today sits on the cusp between a balance and seller's market". To measure market activity, the Sales-to-Listings ratio is often utilized. This tool measures the balance between demand and supply and the market categorization is based off of the ratio.

-- A ratio of three sales for five listings means we are in a seller's market (when the ratio is greater than 55%).
-- A ratio of less than seven sales for every 20 listings means we are in a buyer's market (when the ratio is less than 35%).
-- A ratio between 35 - 55% would be considered a balanced market.

 *Market Type Sales Ratio as per the Real Estate Board of Vancouver & most industry analysts.

Source: REBGV Market Type

The real estate industry is a key economic driver in BC. Despite the preconceived notions of Vancouverites, the Greater Vancouver housing market is seeing demand for housing slightly outpace the supply. We continue to see incremental gains in home values, depending on the neighbourhood and property type. According to the Real Estate Board of Greater Vancouver (REBGV), residential property sales in the Greater Vancouver area has reached 3,061 in July alone, making it the fourth consecutive month that the Greater Vancouver market has exceeded 3,000 sales (McLeod, 2014). Prior to this upsurge in sales, the housing sales have not surpassed this sales mark since June 2011. 

The MLS Home Price Index (HPI) measures home price trends and home price inflation/deflation in residential markets within territories of participating real estate boards in Canada (MLS, 2014). The HPI composite benchmark price for all residential properties in Metro Vancouver is presently at $628,000. For a single family detached unit, the benchmark price is sitting at $980,500. An overview of the property types and their benchmark price in their respective neighbourhood can be found here: MLS Home Price Index. Benchmarks represent a typical property within each market. 

All in all, the housing market in the Greater Vancouver region has been steadily picking up and although supply is continually increasing, the demand for housing has slightly outpaced supply. 

Below you will find the Residential Average Price in the Greater Vancouver region. As you can see, there has been quite some fluctuation over the past 4.5 years. Residential median prices in July 2014 are sitting at around $805,061. 

 Source: The Canadian Real Estate Association