The real estate market may have slowed, but news about it certainly has not.
One of the most popular activities in the daily news cycle seems to be forecasting the future of real estate. And it’s not uncommon to see wildly opposing views on where the market is headed, and when it might get there.
Of course, the reality is this: The market will become more active and prices will recover at some point in the not-too-distant future. It has always been that way, and the fundamentals haven’t changed. People will always need a place to live, Vancouver and the surrounding region will always be an attractive place to live, and our population will continue to grow as we attract people from less desirable regions.
And another reality is that things are not as bleak as some would have you believe. Buyers have more selection now, and slightly better prices. Only those sellers who really want to sell are on the market, removing many of the flippers and opportunists. Neither of those are bad things.
If you are thinking of a move or investment, this can be a very good time to buy. Contact me for the latest facts.
New Construction Trends
Housing starts in Metro Vancouver trended lower in September 2018 as fewer projects in both the single-detached and multi-family sectors got underway.
Construction activity for the month was concentrated in Surrey, which accounted for one-quarter of all starts in the region.
Demand for housing from residents remains strong and has resulted in the pace of new home construction in the Vancouver CMA so far in 2018 equaling the level recorded during the first nine months of 2017.
Relative Rental Costs
As pricey as Toronto and Vancouver have become, they don’t hold a candle to the U.S.’s most expensive rental markets.
According to Padmapper, an average one-bedroom rented for $2,140 this past August in Toronto, and for $2,000 in Vancouver.
Compare that to an average rent — in U.S. dollars — of $4,100 in Manhattan, $3,600 in San Francisco, $3,380 in Boston and $2,800 in Brooklyn. That’s according to data from RentCafe.com, cited by Point2Homes.
Millennial Market Confidence
Most young families in Vancouver’s property market remain confident their property values will do as well or better than other investments, despite a recent slowdown in
the market, according to a new survey commissioned by a property firm.
In total, 79 per cent of Vancouver respondents to the Mustel Group survey of urban residents, ages 20 to 45, reported they “believe that financial gains on their home will outperform or be on par with financial investments over the next five years.”
Greater Vancouver Real Estate Trends
In October the region had almost 35% fewer home sales than in the same month a year ago. But a right spot in the statistics was that October sales were more than 23% higher than September – so maybe the market has turned a corner.
Showing a similar trend, the total number of homes listed for sale on MLS® at the end of October was 42% higher than the same time a year before but slightly lower (0.8%) than were available at the end of September.
Interestingly, prices have softened, but not as much as you might expect with the lower number of sales. In most municipalities detached house Benchmark Prices are down from a year ago an average of only about 5%; West Vancouver and Vancouver’s West Side are the outliers, with Benchmark Price drops of between 10-11%; Maple Ridge and Pitt Meadows houses are up 5.1% and 3.4% respectively over the previous year.
For apartments, every municipality had higher Benchmark Prices than a year earlier, except for West Vancouver, where apartment prices were down slightly, by half of one per cent.
The market is still in flux and trends may not become clear until the spring — so contact me to get the latest.
Source: Real Estate Board of Greater Vancouver
House Prices to Income – Canada & US
In the last decade, the average house price in Canada jumped by 56 per cent (in Vancouver prices more than doubled), a pretty solid windfall for homeowners.
But affordability has become strained because Canadian incomes only rose 15 per cent in that time.
The average home in Canada now costs 6.7 times the average income (up from only 4.9 times ten years ago). In Vancouver, the average home is a whopping 17.3 times average income. (Compare that to Calgary, at 4.1 times average income.)
In the U.S., following a long slump after 2008, the housing market has seen prices grow for six straight years, so the average price is now 24 per cent higher than it was a decade ago. But US incomes grew by 18 per cent in that time, so unlike in Canada, affordability has only worsened slightly, going from a ratio of 4.7 times income to 4.9.
Statistics Source: Point2Homes as reported by Huffington Post