Real (Estate) Talk with Ryan Berlin - March 2020

The rennie review is produced each month by rennie intelligence, which includes the latest real estate data for Vancouver and the Lower Mainland's housing market.

Strong housing fundamentals with economic uncertainty on the horizon

Resale data for February 2020 for the Vancouver region show a continuation of trends that established themselves in July 2019, with sales increasing on a year-over-year basis for the eighth straight month, while inventory contracted for the fifth consecutive month. The consequence of this recalibrated supply-demand landscape has been increases in both year-over-year and month-over-month benchmark prices for all home types. More specifically, detached prices were up 0.2% this past month compared to February 2019, townhome prices were up 0.9%, and condo prices were up 1.1%; meanwhile, detached and townhome prices were up 0.6%, and condos were up 1.9%, compared to January 2020. 

On a neighbourhood basis, benchmark condo prices in Coquitlam and North Van have been rising the fastest in the region, at 3.0% and 2.3%, respectively, while those in Langley (-0.7%), Burnaby South (-1.6%), and West Van (-4.8%) have yet to reach last year’s level. 

Within the detached segment of the market, North Vancouver (+3.1%) and Langley (+1.9%) experienced the largest year-over-year rise in benchmark prices, while West Van (-3.9%) and Burnaby South (-4.2%) remained below last year’s price level more so than other sub-markets.

Based on this (and other economic data), it seems clear that some degree of buyer confidence has returned to the Vancouver region’s housing market. In addition, there remains a substantial amount of pent-up demand as indicated by the difference in recent monthly per capita sales counts and their historical counterparts. For example, there were 1.49 sales in February 2020 per 1,000 residents in the region, which was 19% below the past-decade average of 1.83 (for February). Per capita sales ratios have been below historical averages in all but one of the past 12 months, ranging from 0.5% lower in October 2019 to 45% lower in March 2019.

We expect some of this pent-up demand to be released into over the next 12-18 months, with additional support being provided to the housing market via continued population growth (through migration) and a tight labour market (Vancouver’s unemployment rate fell to 4.4% in February).

All of that said, we would be remiss not to put this into the context of rising economic uncertainty due to the continuing global health crisis and the range of economic dynamics ranging from volatile stock markets and falling oil prices to plunging interest rates and changes to the mortgage stress test. As a result of this confluence of economic headwinds and housing market tailwinds it is as important as ever to continue to track the indicators that matter to us here in the Vancouver region. And while we may endure some turbulence in the short-term, our fundamentals remain solid, which bodes well for both the medium- and long-term future of our housing market.

Our rennie intelligence team comprises our in-house demographer, senior economist, and market analysts. Together, they empower individuals, organizations, and institutions with data-driven market insight and analysis. Experts in urban land economics, community planning, shifting demographics, and real estate trends, their strategic research supports a comprehensive advisory service offering and forms the basis of frequent reports and public presentations. Their thoughtful and objective approach truly embodies the core values of rennie.

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