Market Update – September 2017

September 5, 2017

Yawn-Inducing Stats

The most interesting observation I can make about this month’s stats is just how boring this month’s stats are. Before we get to that, let’s start with the usual stats.

The Numbers

The numbers shown 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 buyer’s markets, below 5 are seller’s 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
Detached 14.2 Up 6.8 Down 3.8 Down 8.4 Up 8.1 Down 4.6 Down
Attached 2.8 Down 3.9 Up 1.9 Same 2.3 Down 2.4 Down 1.7 Down
Condo 1.7 Down 1.0 Down 0.9 Down 1.4 Down 1.1 Down 0.9 Down

Generally speaking, August was another month where our two markets (detached and attached/condo) continued to function in virtual isolation from each other.

Slow Detached Market

As is evident in the numbers, the detached home market continues to be in balance and/or slightly favouring buyers. A notable exception is the west side of Vancouver (we’ve previously talked about this market being a bellweather for the region) that continues to slow and where we are now seeing strong buyer’s market conditions. There is a generally acknowledged sense that the overall market is slowing down and this is certainly one of the indicators that would lead to that conclusion.

Hot Attached Market

On the other hand, the attached and condo markets continue to be roaring hot. Sellers continue to have the upper hand in these markets and have had for some time now. Many of them have been in continuous seller’s markets since around January 2015. Pricing in this segment has continued to escalate at tremendous rates, though this growth in prices does appear to be a bit more restrained now than it has been for much of the last year.

What’s Next?

The Bank of Canada just announced another 0.25% interest rate hike, OFSI is changing the lending requirements and the new provincial government campaigned on the promise of slowing down the housing market/lowering home prices. All of these indicators tell me we are due for a slowdown across the board and that seems to be true already in the detached market. I think it is fair to expect the attached/condo market will also soon slow and prices will plateau in the not-too-distant future.

Alongside these external forces, the reality is that as much as our two markets appear to be functioning independently, they are related and do affect each other. We will soon get to a tipping point where the pricing of an attached/condo unit is so close to a detached house that buyers will move away from attached/condos and come back to detached. To be clear, it is our expectation that this won’t be pronounced enough of an effect to accelerate pricing (at least not dramatically), but it will cause some levelling out of the market conditions between the two markets.

Listen to our Latest Podcast Episodes on The Vancouver UnReal Estate Show

  • Episode 27 – Elton Ash, RE/MAX of Western Canada
  • Episode 29 – UnReal Estate of Whistler with Jeff Hume
  • Episode 30 – Bob DeWit on Home Builders and Housing Affordability
  • Episode 31 – Summer Market Recap and Predictions for the Fall
  • Episode 32 – What Vancouver can Learn from Seattle Real Estate
  • Episode 33 – Vancouver’s Real Estate Therapist, Joannah Connolly