The brain trust here at Real Estate Leads is fortunate to have a very ‘bird’s eye’ view of the Vancouver Real Estate market due to the fact we’re both residents and homeowners here in ‘Lotus Land’. If we’re to look at it from the ‘comparatively speaking’ perspective and in comparison to real estate elsewhere in Canada, homes and property here have always been more expensive compared to elsewhere in the country and that’s not going to change.
It’s one of the most desirable places to live in the world, and many internationally-based surveys have found it to be among the most ‘livable’ cities in the world. If you can look past the mind-boggling congestion and surreally bad traffic, that’s probably true for the most part. But you see, all those people means the supply and demand part of the equation is always going to be tilted towards demand when it comes to housing and real estate.
This is why the recent news from the REBGV that Vancouver had its best September on record this year in terms of the number of homes sold doesn’t come as a big surprise. Yes, COVID has harmed the economy and taken would-be qualified buyers off that list to some extent, but the Vancouver market HAS stayed insulated from market volatilities in the exact way most people predicted it would.
Which, if you ask us, is the way it should be. The people who have equity in their homes have for the most part worked very hard to build that up. They very much deserve to have the same market they had to work hard to buy be defined by the same dynamics when they choose to sell in it.
There are fewer home sellers these days, however, and we touched on that a few weeks back here. Here at Real Estate Leads, our online real estate lead generation service is an excellent way to put realtors like you in a better position to grow their client base in the current challenging environment.
Alright, let’s take a longer look at this good news coming from Vancouver.
The news release from the REBGV said that 3,643 homes were sold in September, and that’s up 56.2 per cent from the 2,333 that went onto the market and were sold in September of last year. Sales were also up 19.6 per cent from the 3,047 homes sold in August, and this type of resiliency is EXACTLY what we’d like to see in housing markets all across the country if that were at all possible.
This is joined by the MLS home price index composite benchmark price for all residential properties hitting $1,041,300 in September, up just under 6% from September 2019. And as we look further at the absolute nature of supply / demand equation as it pertains to Vancouver housing, the wave of homes that hit the market last month was not enough to keep up with demand.
So what happens then? It’s not rocket science – low supply has pushed prices higher, and one can only imagine how much more pronounced that trend will be once the economy moves into a COVID-19 recovery.
There were 6,402 properties newly listed for sale in September, up 10.1 per cent from August. But the sales-to-active listings ratio — a key metric used to analyze home prices — was 27.8 per cent, above the 20 per cent threshold where prices tend to rise.
Relation to Rents
Many reputable sources have indicated that – at least to some extent – the pandemic is pushing rents down in Vancouver. That’s somewhat true, and also somewhat not true.
Experts says low interest rates and changing housing needs during the COVID-19 pandemic have also influenced the market, which is recovering from a lockdown that put the brakes on sales in the spring selling season.
Some 730 attached homes (townhomes and rowhomes most commonly) were sold by Vancouver real estate agents last month, and that’s going along with 1,317 detached homes in September. Further, sales in both categories went up more than 70% from the same time a year ago.
Ad to that the biggest share of sales at 1,596 were for apartments, and that too is up 36.9% year-over-year. A big part of that is related to the median level of affordability, and of course the shortcomings there are related to years of government policies that have created wealth and earning capacity disparities in the city.
Then there’s detached homes, which are the most desirable purchasing options for families for obvious reasons, and especially now that many of them have had a taste of what a lockdown involves. We have biggest price appreciation right here. At $1,507,500, the benchmark price of Vancouver detached homes in September was up 7.8% from September 2019.
Realtors in Vancouver face stiff competition, but generally speaking it’s still an advantageous environment for those who want to make a living working in real estate.
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