The August statistics from the Real Estate Board of Greater Vancouver have arrived and, as expected, they indicate a softening of consumer demand throughout the summer. For the second consecutive month, benchmark prices have fallen across all product types and total sales volume was down 25.2% from the ten year August sales average.
Detached properties continue to experience decreases in HPI price and a single family home is now worth 3.1% less than it was this time last year. Much of this decrease in value has taken place in the last several months, as the Board noted benchmark prices have come down 2.8% since May 2018. What is more, the consistent price appreciation observed in both the apartment and townhouse markets over the last 12 months has been disrupted, with each segment seeing cumulative price declines of 1.2% and 1.6% for July and August, respectively.
The total number of new listings on the MLS in August was 3,881, which was an 18.6% decrease compared to the 4,770 homes newly listed in July and an 8.6% decrease compared to the 4,245 homes listed in August of last year. The total number of homes currently listed across Metro Vancouver is now 11,824, which is a 34.3% increase over August 2017 when there were only 8,807 homes listed, however, the available inventory is still about 17% below the 10 year average of 14,236 for the month of August.
So what does this all mean for development land in Greater Vancouver? It was a particularly quiet summer for Vancouver real estate and many of our developer clients are eager to see what the fall market will bring. In my core markets of Burquitlam and Port Moody, well located, accurately priced multi-family sites are still seeing multiple offer situations, however, price appreciation of land appears to be slowing due to uncertainty regarding the sustainability of end product revenues, as well as steadily rising construction costs. Single family and peripherally located multi-family sites are generating less interest among an increasingly opportunistic buyer pool and will likely need several months of solid end product sales statistics before seeing the demand levels return to those of 2016 and 2017. Frontline Real Estate Services, along with the development community as a whole, will be watching the September sales statistics with keen interest as this month’s performance will be a great indicator of what to expect from the market moving forward.
Please note: areas covered by the Real Estate Board of Greater Vancouver include: Whistler, Sunshine Coast, Squamish, West Vancouver, North Vancouver, Vancouver, Burnaby, New Westminster, Richmond, Port Moody, Port Coquitlam, Coquitlam, Pitt Meadows, Maple Ridge, and South Delta.
View the Real Estate Board of Greater Vancouver’s entire stats package for August 2018 here.