Housing demand showing signs of life
Despite a slowdown from May’s sales pace, the data for June indicate that housing demand may be making a slow but steady comeback throughout the Vancouver region. This slow comeback is in the face of inventory levels that have just climbed back to historical averages.
If you blinked you may have missed it: 6 months have passed since we welcomed in 2019, so it's a good time to evaluate how the real estate market has performed in 2019 compared to previous years.
Before we get there, let’s take a look at the data for June.
Overall, the sales gap remains a feature of the market. For the 17th consecutive month year-over-year sales were down: June sales were 12% below June 2018. Having said that, June’s 3,342 sales were the second-most in the past 12 months (only behind May’s 4,077), hinting that demand might be modestly re-establishing itself.
Total active listings were up 15% in June compared to last year. This was entirely due to an expansion of multi-family inventory as detached listings actually fell by 2% year-over-year. Despite the overall increase in available homes, June’s inventory of 22,400 homes was almost identical to the past decade average for June (22,465), indicating that the supply side of the region’s market has normalized after years of being constrained.
The June data reinforce a pattern of continued movement towards relative balance between supply and demand. To put a statistical point on it, the sales-to-listings ratio in June 2019 fell between 12% (for detached) and 19% (for townhomes), indicating that the markets for all home types were indeed, as per common definitions, balanced region-wide.
So how have we fared through the first half of the year? On the sales front, for every 10 transactions between January and June 2018 there have been 7.7 this year; in other words, year-to-date sales in 2019 are down 23% compared to the same period in 2018, and 34% below the past decade average. Conversely, for every 10 listings in the first six months of 2018, there have been 13.6 this year, so supply is up by 36% over last year, and 1% above historical averages. With recent restrained demand and expanded supply, benchmark prices are down across the board over the past year: by 9% for detached, 8% for condos, and 7% for townhomes. That said, when compared on a month-over-month basis, prices seem to have stabilized for all product types.
With family holidays well underway, people are generally more interested in building sand castles than attending open houses. The coming months will likely provide little insight into where the market is headed. In all likelihood we’ll have a better idea once we’ve digested the September and October data. Until then, we will keep an eye out for any discernible market shifts.
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. View the latest edition of the rennie review.
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.