Real (Estate) Talk with Ryan Berlin - February 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.

Prices beginning to rise as demand outpaces supply

The calendar may now read 2020, but the supply and demand dynamics that were established in the second half of 2019 have clearly carried over into January. This in turn has set the table for what is likely to be an active market throughout the rest of the year, in no small part due to the Vancouver region’s resilient underlying fundamentals.

While January 2019’s sales count left something to be desired--the 1,839 sales in that month were the lowest for any January in a decade--sales in January 2020 were 35% higher, bringing them virtually in line with the past-decade average for the month. January marked the 7th consecutive month of year-over-year sales increases, with sales across all home types, all price ranges, and throughout most Vancouver region sub-markets outpacing the trend from one year ago.

On the flip side, January’s inventory was down by 24% compared to the same time last year, marking four straight months of year-over-year contractions. Anecdotal evidence, particularly for resale condos, suggests that the prevalence of multiple-offer scenarios, subject-free offers, and offers above sellers’ asking prices are on the rise, and this is beginning to create tailwinds for prices. More specifically, for the first time since December 2018, the year-over-year change in the region’s benchmark condo price was positive in January 2020 (up by 0.9% vs January 2019). A similar trend has been seen for detached homes and townhomes. 

Underpinning the market’s latest trajectory are good, if not great, economic and demographic fundamentals. On the population front, the latest data for British Columbia shows that province added more people (approximately 34,000) in the most recent three months than in any quarter dating back to 1971, when data were first collected. This continues to drive the demand for housing, along with a tight labour market in Metro Vancouver: the region’s latest unemployment rate, at 4.5%, is the lowest among larger metros in Canada, indicating that those who are looking for work are finding it. Both short-term and and longer-term interest rates remain historically low, with global economic uncertainty putting additional downward pressure on rates. 

Together, these features of our market landscape point to continued growth in demand generally, and resale counts more specifically. The evidence suggests that first-time home buyers and previously-sidelined buyers are (re-)entering the fray and, as a result, the spring market is shaping up to be a very active one. The longer-term trajectory for the market also remains positive thanks to the region’s growing population and workforce.

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.