Minding The Gaps: Moving-up Just Got Harder

Never before have conditions been so challenging for those looking to move up in our housing market. Something’s got to give.It’s no secret that Metro Vancouver’s housing market—heck, housing markets across Canada…and the United States…and almost everywhere—have been on an upward trajectory over the past couple of years.

This realized destiny was anything but guaranteed when the pandemic began in early-2020, with Canada’s housing authority (the Canada Mortgage and Housing Corporation, or CMHC) actually predicting an 9-18% average home price decline through the balance of 2020 and into early 2021.Welp, that certainly didn’t happen, now did it?

Turns out, generous fiscal supports, historically-cheap money, an inability of people to spend on some of the things they normally did (like holidays), and a pandemic-driven narrowing in on what we most desire in and from our homes—as places to not only live but to work and play, too—have driven up demand and decimated supply.

Prices are up across the board. An interesting and unanticipated artifact of these historically-unique housing market dynamics is that the price differential between home types has risen to astronomical levels.

For example, the most recent gap between the benchmark condo price and its townhome equivalent, at more than $169,200, is seven times what it was before the pandemic began. Similarly, the almost-$920,000 difference between benchmark townhome and detached home prices dwarfs the $700,000 gap during the 2016 market peak, and is more than $300,000 higher than pre-pandemic times.

Needless to say, this is problematic, as it is arguably more difficult than ever for households to move “up market”, short of receiving a windfall from lottery winnings or the Bank of Mom & Dad. While the opportunities for downsizing abound, we expect these unsustainably-high gaps to close somewhat in 2022 as a result of natural market forces, making it a little bit easier for some households to make their next move.Gain more data-driven insights into Metro Vancouver's housing market in the full Spring 2022 rennie landscape.Twice a year, rennie intelligence produces the rennie landscape, that tracks a variety of demographic and economic indicators that directly and indirectly influence our housing market here in Metro Vancouver. Our goal is to provide our community with a basis for evaluating the trajectory of the factors that collectively define the context for the real estate market.