Real (Estate) Talk with Ryan Berlin - May 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.

A new pace for housing supply and demand

In last month’s rennie review commentary, we likened our challenge of managing the economy through these unprecedented times to being in a heavyweight boxing match that is all but guaranteed to go 12 rounds. We are currently only a few rounds in and, as expected, we’re absorbing body blows in the form of employment and housing metrics that are more dramatic than they are unexpected, describing an economy that slowed measurably last month. 

For employment, it is the composition of job losses that is arguably more compelling than the never-been-seen-before magnitude of the overall decline. More specifically, but briefly: persons under the age of 30 accounted for 45% of total provincial job losses over the past two months, compared to representing only 24% of total employment; part-time positions accounted for 43% of the total job decline in BC, while representing 23% of total jobs; and accommodation & food services (i.e. hotels and restaurants) and retail & wholesale trade together have accounted for 52% of jobs losses, compared to normally representing 24% of total jobs. 

Among other things, these features of the changing employment landscape underscore the importance of the extraordinary fiscal and monetary policy responses aimed at supporting Canadians as we navigate this temporary downturn.    

In light of these changes, it wasn’t surprising that MLS sales counts were down in the Vancouver region in April: overall, sales were 43% lower than the same month last year, ranging from detached sales that were 39% lower to condo sales that were down by 48%.

Despite this regularly-cited decline in demand, it is important to acknowledge that the market has remained relatively balanced. This is because the inventory (supply) of available homes also fell, by 34% (on a year-over-year basis). As with sales, each home type experienced a similar drop in supply, ranging from a 30% drop in condo inventory to a 36% drop in the supply of detached homes and townhomes. For now, this feature of our current circumstances differs from what we might expect to see during a traditional economic downturn--an increase in homes available for sale--thanks to well-functioning credit markets and the financial support being provided to businesses and households by different levels of government.  

With benchmark prices rising by 0.3% in April versus March, prices have remained stable. Looking ahead, we expect this new “reduced” equilibrium to prevail in the short-term, with buyers and sellers slowly re-entering the market in the coming months. While we remain in the throes of this figurative boxing match, as we progress from one round to the next we remain confident in our collective ability to come out on top.

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.