This month’s stats provide a glimpse into one of the more interesting times in the Vancouver real estate market and, as usual, what we’re seeing in the media is not a reflection of the stats we are seeing or the market we are experiencing.
Let’s set the scene by starting with the numbers. The numbers shown below are a ratio of the number of active listings (at end of month) over the number of sales in that month. Numbers above 7 are considered to be buyers’ markets, below 5 are sellers’ and in-between are considered balanced. Beside the number, I’ve indicated the direction the market moved when compared to the previous month.
|Months Supply||Van West||Van East||North Van||Richmond||Burnaby||New West|
The first thing I would note is that almost all of the markets have shifted in favour of buyers (and this is the story the media has picked up on). However, it is important to note how divergent the detached and the attached/condo markets have become. With buyers’ market conditions (and strong ones in the Westside, Richmond and Burnaby markets) now the norm for detached homes, we’re starting to see price reductions, offers with subjects and some homes not selling! The picture on strata, however, is entirely different with inventory still not providing buyers with much choice, and multiple offers and subject free still prevalent.
There’s been substantial ink spilled about the potential for a crash, but the numbers don’t yet support that notion. Certainly a buyer’s market will see prices cool – and we’re seeing it on detached now and we expect that strata will follow suit in the not too distant future. However, it’s important to note that there was still a very healthy number of sales when compared to historical numbers. For instance, there was still more sales in August than there were in almost any individual month of 2012. To put more concrete numbers to it, sales for August were down 32% when compared to last year and 27% compared to last month – certainly a slow-down, but, not a complete decimation either.
The foreign buyer property tax has certainly played a part in this, though not in the way many have said. That is, we’ve had several buyers decide not to buy a home at this point as a result but not because they were not Canadian residents (they were), but because they were concerned about the impact the tax would have on the overall market. As such, the tax will likely be successful in achieving its goal, but primarily because enough Canadians believe it will (and because interestingly everyone I’ve talked with has said that most foreign buyers who are looking to buy won’t be discouraged by the tax as we’re still a bargain compared to other markets they might be considering).
What’s next? We expect that our market will continue to cool over the next while, with more inventory coming on in September and sales holding reasonably steady. Historically, August and September track with very similar sales numbers and October sees a small uptick. Given t trends, prices will likely decrease over the coming months, though detached will decrease more dramatically than strata given that it is currently still increasing.