December Greater Vancouver Home Sales

Home Sales Were 25% Below 10-year Sales Average 

According to the Real Estate Board of Greater Vancouver, after tallying the Metro Vancouver total home sales for the year, 2018 suffered the worst sales in 18 years. Total home sales were the lowest since 2000, and were 25% below the region’s 10-year sales average.

There were 24,619 sales of detached, attached and apartment properties on the Multiple Listing Service for 2018, a 31.6% lower than the 35,993 total sales in 2017.

The composite benchmark price for all residential homes in Metro was down 2.7 per cent to $1,032,400. The price of detached homes was down 7.8 per cent.

Over the past 6 months, condo prices declined 6.4%, and townhome prices decreased 5.3%. The indicator to watch for 2019 is "the supply of homes for sale"

Mortgage Stress Test - B20 Regulation

Canada's federal finance regulator has implemented mortgage rules as of January 1 2018, at a time when mortgage rates are on the rise. The Bank of Canada after hiking the overnight rate five times over the past six quarters, together with the stress testing, has added 3% to the qualifying rate for homebuyers.

The stress test has been commonly cited as one of the main causes of the Canadian housing market cooldown. The stress test is based on “the greater of the Bank of Canada’s five-year benchmark rate (currently 5.34 per cent), or the contract mortgage rate plus two percentage points.” The stress test effectively lowers the purchasing power of home buyers by about 20%.

There are speculations that policymakers may ease stress testing if the Canadian housing market continues on its downward trajectory this year.

Detached Home Values Sink

The spectacular rise in detached home prices peaked in 2016, is now on its way back down. Since early 2017, the dramatic changes in the real estate market had shifted into a buyer’s market, especially for detached homes and particularly for the priciest mansions in Greater Vancouver.

According to statistics released last week by BC Assessment, an average single-family home fell around 12 per cent in value in 12 months, from July 2017 to July 2018.

Related Links:

Stress Tests Disqualifying 18% of Canadian Home Buyers
Global Assets: Greater Vancouver Real Estate
November Home Sales Down 42.5%

The values for more expensive properties showed the biggest decline of 15% to 17%, according to data analyzed by Landcor Data Corp. North Shore News reported headline "Real estate values sink for detached homes in West Vancouver, North Vancouver" highlighted the housing market situation in the north shore of Vancouver

Since the July assessment date, Realtors say the market has continued to fall. "In some high-end West Vancouver neighbourhoods, houses have sold in the past few months for $1 million under their assessed values".

Presale condos Completion

Many presale projects will be completing soon. With over 40,000 homes coming on stream and due for completion, the stress test imposed for loan approval effectively reduces about 20% of the loan amounts new condo buyers can get to complete their purchases. The situation will arise that the presale condo buyers will be forced to come out with more money to cover the shortfall, or forced to sell their condos.

Vancouver preconstruction condos price collapse danger

There will likely be many such forced sales situations, selling through assignments of their contacts. If the market turns bad suddenly, many may be forced to sell at a loss or walk away and lose the deposits they paid for their presale condos.

Return to homepage.

Reciprocity Logo The data relating to real estate on this website comes in part from the MLS® Reciprocity program of either the Greater Vancouver REALTORS® (GVR), the Fraser Valley Real Estate Board (FVREB) or the Chilliwack and District Real Estate Board (CADREB). Real estate listings held by participating real estate firms are marked with the MLS® logo and detailed information about the listing includes the name of the listing agent. This representation is based in whole or part on data generated by either the GVR, the FVREB or the CADREB which assumes no responsibility for its accuracy. The materials contained on this page may not be reproduced without the express written consent of either the GVR, the FVREB or the CADREB.