Real estate is, by far, the most consistent hot topic in our fair city. From political caucuses to the water cooler in lunch rooms, everyone has discussions about the market fueled by the endless headlines, reports, and stats thrown at us daily. Nowadays, with the use of social media, it’s fairly easy to find an abnormal case or particular stats to generate a dramatic story. Our main source of information are Twitter feeds, Facebook posts, and sub 30-second videos. If you read past the 2nd paragraph of an article or watch a 2-minute news video, you’re either really into the topic or old school. This fast paced, insta-information society that we live in is prompted to make up their opinion almost instantaneously – and boy, that can be really costly in real estate. In our newsletters, we will be cutting through the BS with information that really matters.
After implementing numerous taxes and introducing the 2% stress test, the government successfully slowed down the market. Now that everyone has had time to adapt, we’re starting to see the real results which enable us to compare with previous cycles.
There have been 3 significant slowdowns in the Vancouver market over the past 20 years. During 1997 - 1999, 2008 - 2009 and 2012 - 2013 monthly home sales in Greater Vancouver persisted below 2,000 units. In each of these periods, there were either over or close to 20,000 listings on the market. In this current cycle, we are seeing the market struggle to get over 15,000 active listings at a time when the overall housing stock is at its highest!
This lack of supply during one of the slowest markets we’ve encountered in 30 years shows that sellers are not looking to “panic sell” but mostly taking a “hold and wait” approach. Long term confidence in Metro Vancouver real estate is still high so we’re already seeing stabilization and balanced markets across the Lower Mainland. We may be seeing prices bottom out in the lower end and middlerange which means the perfect time to buy is now.
Supply of homes, especially the right supply, will continue to be an issue without being addressed by government at all levels. Increased taxes, higher costs, and restrictive zoning are forcing developers to pull back and delay some of their projects. This will undoubtedly result in a lack of new supply in the next 2 to 4 years. That, coupled with low resale inventories, significant pent up demand, a growing population, and Metro Vancouver being a region where people gravitate to, the cycle will continue with demand outstripping supply and prices rising.
When it comes to property values, our city is very product and area specific. While the market is influenced by its economic and political environments, people still need to sift through a lot of information to find out how they impact their specific situation. Our job is to analyze and deliver the pertinent information to you, our clients, in a manner that clarifies and give you the tools to make the best possible decision. We hope that our publications and market updates help you better understand this crazy market but, if you need information on a specific area or property, please contact us a more in depth analysis.