Housing sales in the Vancouver region are rising while prices decline to their lowest level in 27 months.
Sales of detached homes, condos and townhouses totalled 2,231 in August, up 15.7 per cent compared with the same month in 2018, but 9.2 per cent beneath the 10-year average for August, the Real Estate Board of Greater Vancouver said on Wednesday.
The residential benchmark price decreased last month to $993,300, down 8.3 per cent from a year earlier.
The benchmark figure, an industry representation of the typical home sold in Greater Vancouver, has declined month over month for the 15th consecutive time. It has fallen from a record high of $1.1-million in May, 2018, and slumped to the lowest level since $992,500 in May, 2017, according to the board.
“Prices are still softening, but at a much slower pace than they had been previously,” board president Ashley Smith said in an interview. “Affordability is still an issue, and we’ll be seeing more sales in the lower-price categories."
There were 13,396 properties listed for sale last month in the Vancouver region, a 13.3-per-cent increase over August, 2018.
A measurement closely watched by the housing industry, known as the sales-to-active-listings ratio, reached 16.7 per cent in Greater Vancouver last month. B.C. real estate agents consider it a balanced market when the ratio ranges from 12 to 20 per cent. It is deemed a buyer’s market below 12 per cent and a seller’s market above 20 per cent if sustained over several months.
July sales rose 23.5 per cent from the same month in 2018, marking the first time monthly sales increased year over year since January, 2018.
“We’re getting back to more of a normalized market,” Ms. Smith said. “We’ve seen an uptick in the number of sales. What that will equate to in terms of price is to be determined. It’s really going to be dependent on the behaviour of buyers and sellers."
Tsur Somerville, a professor at the University of British Columbia’s Sauder School of Business, said this summer’s sales recovery is in contrast with multiyear lows in transactions experienced in 2018 and brisk sales from 2013 to 2017. “It’s certainly indicative of coming off of a bottom,” he said in an interview on Wednesday. “It’s a return to a calmer level of activity and not the hyperactivity that we saw for a number of years.”
In July, 2016, Greater Vancouver’s sales-to-active listings ratio hit 38.6 per cent – firmly a seller’s market with bidding wars common at the time.
Prof. Somerville pointed out that price drops for condos haven’t been as steep as for detached homes. The benchmark price for condos sold in Greater Vancouver fell to $654,000 last month, or a 7.4-per-cent decrease from a year earlier. August’s benchmark price for detached properties sold was $1,406,700, down 9.8 per cent compared with the same month in 2018.
“A recovery in sales will firm up the bottom on prices, but it’s too early to say whether that means a slower price decline, flattening or any kind of increase,” Prof. Somerville said. “But what we know historically is that when you see this kind of sales recovery, that’s an indication that the worst part of price declines is behind you.”
In the Fraser Valley Real Estate Board’s territory, which includes the sprawling Vancouver suburb of Surrey, there were 1,297 sales last month, up 12.3 per cent from August, 2018. The average price for detached houses sold in the Fraser Valley slipped to $1,006,465 last month, down 0.2 per cent from a year earlier.
Industry observers say provincial factors influencing the housing market include taxes aimed at higher-end properties and a crackdown on money laundering, as well as what the province calls a “speculation and vacancy tax,” which targets primarily non-B.C. residents who don’t rent out their homes.
The B.C. government’s foreign-buyers tax took in effect in August, 2016, responding to concerns about the role of international influences during the housing boom from mid-2013 to mid-2016.
Federally, Canada’s banking regulator implemented a stress test on Jan. 1, 2018, making it more difficult for buyers to qualify for mortgages.
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