The July statistics from the Real Estate Board of Greater Vancouver indicate a market in transition. Sales volumes are down, supply of available resale inventory is up and benchmark prices are down across all residential product types.
The Board reports 2,070 residential transactions took place on the MLS in July, which was a 30.1% decrease from July 2017 and a 14.6% decrease from the 2,425 homes sold last month. The total number of sales was also 29.3% below the 10 year average for the month of July. This reduction in demand was not limited to a single product type, the 637 detached property sales, 1,079 condo sales and 354 townhome sales for July were all substantial decreases from the same period last year.
At the end of July, there were 12,137 homes listed for sale on the MLS in Greater Vancouver, which is a 32% increase in available supply over July 2017 and a 1.6% increase over the 11,947 homes that were available on the MLS at the end of July of this year.
Benchmark pricing fell slightly across all product types last month. Single family homes saw a 0.6% decrease in benchmark pricing month over month while condo and townhouse are down 0.5% and 0.4% respectively. Whether the observed price reductions in multi-family are a trend influenced by the apparent decrease in demand or a product of seasonality remains to be seen, however, the sales to active listings ratio for all product types is at 17.1%, indicative of a balanced market. While the single family category can expect further price depreciation with a ratio of 9.9%, the ratios for both townhouse (20.2%) and condo (27.3%) show that those product types are still in a seller’s markets and can generally expect upward pricing pressure until the ratios drop below the 20% plateau for an extended period of time.
So what does this all mean? Summer is traditionally a slower time for the residential real estate sector in Vancouver and it appears that this year that is particularly so. Many of our developer clients North of the Fraser have opted to take a “wait and see” approach and are being more cautious when it comes to making development land purchases. That being said, transit oriented multi-family development land is still a hot commodity and multiple bid scenarios are still the norm for prime sites. With new townhouse and condo launches continuing to sell briskly for high revenues, this will likely continue to be the case moving forward. However, we will continue to monitor the MLS stats closely over the next several months to identify whether we are witnessing a much needed summer break or a fundamental shift in buyer demand in the Vancouver market.
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 July 2018 here.