The August residential market statistics are in from the Real Estate Board of Greater Vancouver and they indicate continued strong market activity through what is typically one of the slower months of the year.
Sales of all product types totalled 3,047 for the month which was a slight (2.6%) dip from the 3,128 deals done in July but still 19.9% above the 10 year average for the month of August.
The recent flurry of home buyer activity seems to have nudged many prospective vendors off the sidelines as 5,813 properties came to market in August. This boost in new inventory is promising for would be buyers, however it will likely take several months of increased supply coming to market to meaningfully impact inventory or prices. Right now, there are still 593 fewer homes available for purchase than there were at this time last year.
Continued constraints on supply has, unsurprisingly, contributed to month-over-month price increases across the board in August, with single family and townhouse HPI prices increasing 1% and 1.1% respectively. These price increases seem to be driven largely by a massive increase in demand amongst prospective owner-occupiers with detached homes seeing a 55.1% increase in sales volumes over last August and townhouse sales volume increasing by 51.6%. Condo sales, while still outperforming expectations, “only” increased by 19.4% year-over-year.
So What Does This Mean For The Development Land Market North Of The Fraser?
Activity in the resale market has yet to translate to increased demand for residential development land in our core markets North of the Fraser. In particular, sales of high-rise condo sites have drastically decreased this year, as many developers lack confidence that a project launch will see enough presales to hit construction financing targets. As such, the number of available development sites near SkyTrain stations across Metro Vancouver has increased to a level not seen in some time. Developers of concrete high-rises can now afford to be more picky and more opportunistic when it comes to making an acquisition, which has resulted in a drop in bid prices for these sites across the board.
The market for wood frame and townhouse sites is more active than high rise sites, however pricing is lower and terms are longer than in recent years. This market dynamic has some vendors questioning whether the time is right to sell or not. Given the amount of stimulus injected in to the economy recently, and the expected increase in asset values that usually follows, those who have the ability to sit and wait for the current prevailing economic uncertainties to clear may be wise to do so.
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 2020 here.
This representation is based in whole or in part on data generated by the Real Estate Board of Greater Vancouver which assumes no responsibility for its accuracy.