Real (Estate) Talk with Ryan Berlin - July 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.Buyers come out in droves in JuneJune was a strong month for Vancouver’s real estate market, with the region tallying 4,067 MLS sales; this was the highest monthly count in 2020 so far, and the most sales since October 2019’s 4,361. June’s total sales count was also 80% higher--that’s not a typo--than the 2,264 sales registered in May (which in turn were 27% higher than the 2020 low of 1,776 sales in April). At a high level it appears evident that buyers in this market are confident about both the near-term and longer-term prospects of Vancouver real estate, despite the acute challenges still facing our economy as a result of the ongoing health crisis.

Within the Vancouver region as a whole, both the North of the Fraser and South of the Fraser sub-markets experienced significant month-over-month surges in sales in June, with the 2,452 sales North of the Fraser (covering the Greater Vancouver board area) up 64% over May, and the 1,615 sales South of the Fraser (covering the Fraser Valley board area) up 111%. 

Notably, regional sales counts for each of detached homes, townhomes, and condos were all similarly higher in June versus May, ranging tightly from a 78% increase for townhomes to 80% for detached homes. Within the region, the fastest month-over-month growth was in South of the Fraser condos, which jumped 113% between May and June, with South of the Fraser detached home and townhome sales more than doubling as well, rising by 112% and by 102%, respectively.

With 69% of June’s home sales occurring at under $1 million, one could be forgiven for thinking that the changes CMHC instituted on July 1st--making it more difficult for some borrowers to obtain mortgage default insurance, which is only available for homes valued at less than $1 million--spurred buying activity before the rule change. While this may be true for some purchasers, the 69% share of total sales being under $1 million is lower than the 72% of sales over the prior 12 months being under this value threshold. And while the 81% increase in homes sold under $1 million between May and June is higher than the 76% increase in homes sold for $1 million or more, the difference is not significant, with the market demand rising sharply at both ends of the price spectrum. 

With inventory still constrained--regionally, the 17,298 total listings in June were down 23% year-over-year and 26% versus the long-run June average, despite rising by 8% above May’s level--and the national, provincial, and regional economy carefully re-booting, conditions are likely to remain favourable to sellers in the months ahead as previously pent-up demand continues to re-emerge. 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.