*For stats packages, videos, and graphs, please scroll down
A new year, and an emerging new market…
Political intrigue, rising rates, a continuing correction… SO MANY real or perceived influences to our local market! Let’s chew on a few of the main ones…
It was the early ’90’s the last time we had left-leaning governance at the municipal, provincial, AND federal level… but Vancouver was truly a ‘small city/big town’ back then, where-as now it’s an emerging global city, as well as a firm member of the ‘global super-luxury market’… so, while the general business climate is perhaps not as ‘business friendly’ as it was under the liberals, there is more than enough of a regional economic engine built up at this point to likely avoid any policy-driven major exodus of jobs or opportunities.
Mortgage rates ARE rising, however the rate of increase is now likely to be tempered by resurgent global economic uncertainty. Borrowing guidelines and qualification rules have clearly already had an impact, with the market to have likely finished adjusting in relation to this factor within the next few months. Whether this means sellers will need to adjust prices further to entice newly-constricted buyers to bite, remains to be seen…
In regards to wealthy foreign buyers (from ANY country), while their behavior does have a bit of a ‘trickle-down’ effect, it is of very minimal significance in the price ranges that the vast majority of sales happen within. For example, of the approximately 7,100 sales that happened in Vancouver proper going back 12 months, approximately 86% of those were under $2m., and 56% under $1m. Furthermore, with the introduction of the Foreign Buyer Tax in 2016, demand for detached properties dropped dramatically… yet demand for condos and townhomes, where the majority of sales happen, INCREASED. The ratio of sales under $1m vs $1m to $2m vs over $2m was virtually identical prior to the introduction of the tax, to what it was over the last year. This was the final indicator that made it impossible for our municipal and provincial governance to point fingers elsewhere and be wilfully blind (in the interest of political survivorship!) to the fact that density and population growth are by far the main problems, and that the development process (zoning, permits, etc.) is both the obstacle (antiquated zoning and nimby/nimnby-ism) and the solution. And while there ARE many new density initiatives under way, the projected pace of new home creation is very unlikely to keep pace with projected population growth.
What has remained the same? Overall demand for housing vs limited land supply, a strong economy with burgeoning new industry hubs (technology), and a strong flow of skilled immigrants and foreign students (Canada, and Vancouver in particular, is benefitting greatly from the ‘Trump effect’ in this regard).
The bottom line? Prices rose too high, too fast, in the last few years, that much is clear… but by how much? Who knows. Either way, expect resilience, and likely sooner rather than later. The last time Vancouver weathered a more significant correction, starting in spring 2008, it took less than a year for the ‘bottom’ to be found, and barely 18 months (spring ’08 to fall ’09) for prices to recover. It’s reasonable to consider that we are currently at least 6-8+ months into this correction. We will not soon (or ever..?) see the rate of appreciation we saw over the last few years, and the current dip may not have fully ‘bottomed out’ quite yet… but the Vancouver market is not sliding into the abyss, by any means. So, capitalize or insulate yourself wisely through the current correction if you already have property or are an investor (rents have NOT dropped!), and if you are not a home-owner yet, this is a great time to explore ‘getting in’!
Enjoy the below stats packages, and we are always very happy to discuss your goals or aspirations.
Have an awesome start to 2019, from our families to you and yours!
SUMMARY VIDEOS – ALL AREAS
COMPREHENSIVE STATISTICS PACKAGES
CLICK BUTTONS TO VIEW
SALES RATIO HISTORY
0-.12 Buyer’s Market ~ .13-.20 Balanced ~ .21+ Seller’s Market
MEDIAN SALES PRICE HISTORY