Finally a news article that catches my attention, “Vancouver home sales hit 33-year low” from The Globe and Mail on Wednesday, April 3/19. 33 years ago, in 1986, the lower mainland population was 50% less than it was now, with a population of 1,266,152. Today we are sitting at a population of 2,555,884. There’s a lot more real estate to sell now compared to 1986, making this 33 year low more serious. The article reports that in Greater Vancouver there were 17,127 sales in March. What I found startling is that out of the 14,245 realtors there are in the Greater Vancouver area, only 1 out of 12 made a deal last month.

The article stated that the benchmark price of the typical home sold in Vancouver declined 7.7% compared to a year earlier. What I’ve found is some of the sales I’ve done have been up to 40% less, especially on land development deals. On the other hand, values in condominiums in Mt. Pleasant I’m just starting to notice a dip. I’m sure as more articles like this come out, buyers will get even more nervous.

The article also talks about speculation and vacancy tax targeted at out of province residents. Most of these buyers were coming over from mainland China, however it’s not this tax that has discouraged the inflow of foreign money, it’s the Chinese government crackdown on money leaving. The fact is these people can’t get their money out of China and unfortunately this tax is now mainly affecting local buyers. Your average mom and pop that live in Vancouver and want to have a condo in Victoria are the ones paying the price.

Talking about real numbers, here is a screenshot I took from the MLS showing a typical day in today’s market. 169 new listings and only 53 sold. This means that new listings are outpacing sales 1:3. We are seeing a tremendous buildup in supply, and we all know the simple economics of supply and demand, the more supply and less demand equals prices dropping. 

 

 

The bright news is, by the time papers such as the article I’m referring to start talking about how bad the market is, it’s usually starting to get better as they’re always six months behind. I’ve already seen the bottom in some areas, and feel that we will definitely be at the bottom for Vancouver detached houses by July while condos will continue to drop through the fall. This gives opportunities for first time home buyers, people wanting to move up, and developers to pick up some deals. I’m having clients buy in areas they never thought they could before because of the lower end market holding strong and the higher end market getting hit hard. This is the time to buy.