Greater Vancouver’s housing market is showing early signs of a revival in sales, an uptick that bodes well for the bellwether market and the rest of the country.
In June, sales surged 11.9 per cent in Greater Vancouver compared with June, 2012, for single-family detached homes, condos and townhouses – the biggest percentage jump in two years. In May, residential sales volume climbed a mere 1 per cent in Greater Vancouver, following a 19-month stretch of year-over-year declines in the number of properties sold.
The Vancouver, Victoria and Calgary markets all displayed strength in June sales.
Total June sales reported by the Calgary Real Estate Board increased 5.5 per cent year-over-year while overall sales in Greater Victoria rose 6.6 per cent.
Calgary “somehow managed to post yet another gain last month, despite the incredible disruption of the flood,” BMO Nesbitt Burns Inc. chief economist Douglas Porter said in a research note Wednesday. “More telling, Vancouver popped 11.9 per cent above (admittedly soft) year-ago levels in June.”
Last month, 2,642 Greater Vancouver properties changed hands on the Multiple Listing Service, compared with 2,362 sales in June of 2012.
“If these results are at all indicative, it looks like Canadian home sales remained surprisingly resilient again in June,” Mr. Porter said, adding that the housing market’s tentative recovery now faces another test owing to longer-term mortgage rates edging up in recent weeks.
Still, the Real Estate Board of Greater Vancouver noted that last month’s sales of single-family detached homes, condos and townhouses were 22.2-per-cent below the 10-year average for June. Also, June’s sales were down 8.3 per cent from May’s 2,882 homes that were sold on the MLS.
While the Vancouver area’s residential housing prices slipped 3 per cent in June, Mr. Porter thinks the worst may be over for the local market. The benchmark index price, which strips out the most expensive properties, was $601,900 in June for resale single-family detached homes, condos and townhouses. That is a decrease of $18,700 from $620,600 in the same month of 2012.
Index prices in June climbed 2.3 per cent from January’s $588,100.
In the Fraser Valley, which includes the sprawling and less-expensive Vancouver suburb of Surrey, benchmark June prices for existing single-family detached homes, condos and townhouses slipped 0.6 per cent to $428,400. Sales volume in the Fraser Valley decreased 9.3 per cent in June to 1,327, underscoring the cautionary view from housing experts who say a broad-based recovery in sales will take time.
A measurement closely watched by the real estate industry, known as the sales-to-active-listings ratio, registered 15.3 per cent in Greater Vancouver last month. B.C. real estate agents consider it a balanced market when the ratio ranges from 15 to 20 per cent. It is deemed a buyer’s market below 15 per cent and a seller’s market above 20 per cent in the Vancouver region.
A balanced market means that key housing indicators such as prices are stable, with more buyers and sellers able to reach deals than a year earlier, said Greater Vancouver board president Sandra Wyant.
In two key neighbourhoods, index prices for single-family detached homes dropped year-over-year but perked up on a six-month basis. On Vancouver’s west side, the benchmark price of $2.07-million for a detached house was down 6.1 per cent from June of 2012, but up 3.3 per cent from December’s figure. On Vancouver’s east side, detached homes had a June benchmark price of $845,900, down 2.2 per cent year-over-year but up 2 per cent over a six-month period.