Observations From Your Real Estate Lawyer in Downtown Vancouver
As Vancouver real estate lawyers, we’re noticing a substantial change in the market as a result of the property changes introduced in 2018. Vancouver is observing a shift toward a balanced market, where there are more properties for sale than buyers, resulting in downward pressure on real estate prices.
How does this trend affect the real estate market? Primarily, we’re noticing fewer sales in Vancouver overall.
The Real Estate Board of Greater Vancouver (REBGV) has noted that Greater Vancouver real estate prices are down by over 6% compared to the same time period last year. Prices are dropping throughout the Lower Mainland, from Vancouver East (with a drop in price of 6.7%) to Vancouver West (a drop of 8.3%).
These numbers signal the largest decrease in housing prices in a decade.
Annual Vancouver Real Estate Trends
How are specific housing types affected by this real estate shift toward a balanced market?
REBGV has noted that the benchmark home cost of $1,016,600 in February 2019 is a 6% drop from prices in February 2018. The price of condos and townhomes has also dropped by 3-4%.
In terms of single family homes, we’ve observed the third consecutive year of declining sales. Luxury property sales fell by 49% this year, owing in part to a 5% increase to the foreign-buyers tax.
While condo market sales have dipped by 4%, they still seem to be one of the most affordable and resilient options for potential real estate owners. Many buyers are opting for co-ownership in order to purchase property, a trend we’ve been noticing more of in recent months.
What’s To Come?
Overall, 2019 is starting with a standstill in real estate sales—comparable to that of a recession.
We have noticed a 26% drop in sales across all housing types from 2017 through 2018, and we estimate that we are sitting on the precipice of a potential market correction.
In February, the Sales-To-Active-Listings (SALR) ratio in Vancouver was 12.8%—a drop of over 50% from the previous year. This SALR ratio is considered to be on the edge of a balanced market, and the market could still go either way.
Now that there are more properties on the market than there are buyers, there seem to be mismatched expectations between buyer and seller. Sellers have begun to slowly lower their prices in an attempt to entice would-be buyers, but the buyers continue to hold out, expecting a continued market correction.
While everyone is holding out to see what happens to the market, now is the perfect time to research your options and mentally prepare yourself to take action as soon as you notice changes. We know that the Vancouver real estate market shifts rapidly, so now could be a good time to contact a real estate lawyer to get your finances in order.
At our downtown office, our Vancouver real estate lawyers at Morris Notary have noticed fewer first-time home buyers in the market, with stricter mortgage stress as the key culprit.