The uptick in sales seen in October did not carry on into November as the Greater Vancouver real estate market continued to see many would-be buyers taking a “wait and see approach” as we head into the holidays. Overall sales were down 42.5% relative to November of last year, when buyers were scrambling to get ahead of the looming mortgage stress test that took hold in January 2018. Sales were also down relative to the 10 year average by 34.7% with the fewest November sales since 2008.
Month-over-month, benchmark prices continued to slide modestly across all product types in all of Frontline Real Estate Services’ core north of the Fraser markets. Year-over-year, the composite benchmark price for all property types decreased 1.4%, largely influenced by the substantial drop in single family home values which were down 6.5% year over year. Multi-family benchmark prices, on the other hand, remained up year-over-year, with condos seeing a 2.3% increase and townhouses seeing a 2.6% increase.
What does this mean for development land in Greater Vancouver? With many forecasting a continued squeeze on affordability due to rising interest rates, taxes and the continued use of the mortgage stress test, our developer clients are now forecasting lower revenue figures in their proformas for sites north of the Fraser. This, coupled with an increase in the number of development sites for sale across the market, has put downward pressure on buyer’s price tolerance for development land in Burquitlam and, to a lesser degree, New Westminster. Vendor’s expectations have yet to adjust but the reality is that the market has shifted and will likely remain flat, at least on the multi-family side, as we close out 2018.
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 November 2018 here.