Data points, trends, and a market on the mend
It’s been a fascinating couple of months for real estate market watchers in the Vancouver region, as the increase in demand that we saw at the beginning of the summer holidays continued through to their end. More specifically, after sales increased by 19% on a year-over-year basis in July, they were up by 15% in August (again, compared to last year). This is noteworthy for two reasons.
First, these back-to-back increases were the region’s first year-over-year increases in 18 months. As we’ve been noting since the start of 2019, the downward pressure on sales that originated from both the slew of national-to-local demand-suppressing policies and from buyers’ price fatigue would eventually abate in the face of continued demographic and economic growth. Add to that the fact that per capita sales activity has been significantly below what would be considered typical for this market, and it’s clear that the stage had already been set for a change in market trajectory.
Secondly, economic conditions are such that Canada (which just registered 3.7% annual growth in GDP, the highest among G7 nations), and more specifically the Vancouver region, each resemble an oasis in a world increasingly beset by political turmoil, conflict, and uncertainty. In Greater Vancouver, the past year has seen employment grow by 6.5% (second-fastest among metros in Canada; Calgary was tops, at 6.6%); the unemployment rate fall to its theoretical floor (4.0%); and median weekly wages increase by 6.0%--three times the national average and twice as fast as regional inflation. As we look ahead, all of this creates a solid foundation for a housing market that by almost all measures (including rebounding sales, a slowdown in inventory expansion, and a plateauing of prices) has already begun to turn a corner.
Last month, in reference to the July sales bump, we noted that one data point does not make a trend. With August revealing a second sales bump, it begs the question: do two months of increasing sales make a trend? While the answer to this may depend on who you ask, we can all agree that it’s the third and fourth points that will ultimately shed light on the trajectory of the developing trend (is it linear? parabolic? exponential?).
For this reason, and because many would-be buyers re-emerge from their summer hiatus in September, we’ll be keeping a keen eye on the evolution of the region’s housing market through the balance of this month with a view to projecting how 2019 is likely to play out for buyers and sellers throughout the region.
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.
It’s been a fascinating couple of months for real estate market watchers in the Vancouver region, as the increase in demand that we saw at the beginning of the summer holidays continued through to their end. More specifically, after sales increased by 19% on a year-over-year basis in July, they were up by 15% in August (again, compared to last year). This is noteworthy for two reasons.
First, these back-to-back increases were the region’s first year-over-year increases in 18 months. As we’ve been noting since the start of 2019, the downward pressure on sales that originated from both the slew of national-to-local demand-suppressing policies and from buyers’ price fatigue would eventually abate in the face of continued demographic and economic growth. Add to that the fact that per capita sales activity has been significantly below what would be considered typical for this market, and it’s clear that the stage had already been set for a change in market trajectory.
Secondly, economic conditions are such that Canada (which just registered 3.7% annual growth in GDP, the highest among G7 nations), and more specifically the Vancouver region, each resemble an oasis in a world increasingly beset by political turmoil, conflict, and uncertainty. In Greater Vancouver, the past year has seen employment grow by 6.5% (second-fastest among metros in Canada; Calgary was tops, at 6.6%); the unemployment rate fall to its theoretical floor (4.0%); and median weekly wages increase by 6.0%--three times the national average and twice as fast as regional inflation. As we look ahead, all of this creates a solid foundation for a housing market that by almost all measures (including rebounding sales, a slowdown in inventory expansion, and a plateauing of prices) has already begun to turn a corner.
Last month, in reference to the July sales bump, we noted that one data point does not make a trend. With August revealing a second sales bump, it begs the question: do two months of increasing sales make a trend? While the answer to this may depend on who you ask, we can all agree that it’s the third and fourth points that will ultimately shed light on the trajectory of the developing trend (is it linear? parabolic? exponential?).
For this reason, and because many would-be buyers re-emerge from their summer hiatus in September, we’ll be keeping a keen eye on the evolution of the region’s housing market through the balance of this month with a view to projecting how 2019 is likely to play out for buyers and sellers throughout the region.
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.
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 Talk with Ryan Berlin - September 2019 ){kind=link}