Balanced market conditions, driven by inventory expansions
The normalizing of the Vancouver real estate market continued into October, with the supply-demand dynamic established earlier in the year carrying into the fall.
On a year-over-year basis, sales in October were down 35%, with no one product type deviating much from this average. With this decline in sales, inventory continues to expand, as multi-family product leads the way: on a year-over-year basis, total townhome listings were up 61% while condo listings were up 86% (in comparison, detached inventory rose by only 7%).
Despite the significant expansion of townhome and condo inventory, it’s useful to note that when compared to the past-decade’s October average, the total number of listings in October 2018 were still lower by 11% for townhomes and by 20% for condos. This rapid expansion of multi-family inventories, while remaining below their long-run average, speaks to the available supply of these product types being constrained as recently as early-2018. Considering recent trends in this way reinforces the notion that the market is normalizing as it moves back to a more balanced supply-demand equilibrium.
Beginning in June 2018, benchmark prices began to reflect this re-balancing of supply and demand. With benchmark detached prices having now decreased in five consecutive months, benchmark townhome and condo prices have also dipped for each of the past four months. These cumulative changes have resulted in current benchmark detached prices sitting 5% below last year, while townhome and condo prices—buttressed by their run-up into Summer 2018—remain up 4% and 6%, respectively, versus October 2017.
As measured by the sales-to- listings ratio, overall market conditions have tilted from strongly favouring sellers earlier this year to now being in balance. When considered by product type, the detached market actually favours buyers (and has since June), that of townhomes has been balanced for the past three months, while the condo market teeters on the threshold between balanced and slightly favouring sellers.
Of course, conditions and market dynamics within any one sub-market within the region vary depending on available product types and price points, among other factors. For example, the markets for townhomes and condos in East Vancouver remain strongly tilted in favour of sellers. Conversely, due largely to price point, West Vancouver’s condo market is on the verge of favouring buyers.
More so than in a market that is marching unambiguously upwards or downwards, current conditions—which increasingly lack direction—yield a mixed-bag of results across the region’s diverse range of neighbourhoods. As a result, buyers, sellers, and agents are obliged to monitor market activity more frequently in order to stay on top of the latest trends, something rennie intelligence will continue to do as we all begin to set our sights on 2019.
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.