Would you buy a home now??

Greater Vancouver housing prices may prove resilient in spite of the provincial government intervention intended to cool the market and moderate price increases. Interfering in free market dynamics seldom has the desired effect, long-term. While the government’s significant foreign buyer tax will continue to deter some foreign investment in higher priced properties, and the fed’s recent changes to mortgage rules will certainly remove a number of buyers from the pool of mostly entry-level properties, we believe it is reasonable to believe most of the market will remain attractive and active.

We expect increased market activity in early Spring 2017. I say this without the advantage of a crystal ball, of course. However, we usually witness a rebound effect when buying activity slows because of seasonal effect or outside influence. The number of folks who ‘want’ to buy is not diminishing, therefore, at some point the pool of Buyers will swell through a period of seasonal or artificially interrupted demand.

Here is a brief synopsis of recent activity affecting the market for detached, single-family homes in four parts of Greater Vancouver during the months of October and November 2016.

October 2016
Detached Homes     Listings (1 mo. chg)    /    Sales (1 mo. chg)
Vancouver East:              233 (-21.3%)    /    65 (+4.8%)
Vancouver West:             163 (-34.8%)    /    78 (+30%)
Burnaby:                           160 (-12.6%)    /    44 (-24.1%)
North Vancouver:           156 (-27.4%)    /    61 (+15.1%)

November 2016
Detached Homes     Listings (1 mo. chg)   /    Sales (1 mo. chg)
Vancouver East:              212 (-9.0%)      /    77 (+18.5%)
Vancouver West:             122 (-25.2%)    /    68 (-12.8%)
Burnaby:                           96 (-40.0%)      /     48 (+9.1%)
North Vancouver:           84 (-46.2%)      /    61 (unchg)

Notice how buying activity (sales) is mostly stronger since September while listings inventory drops.

Here is some context, though. If we compare the number of sales for detached homes during the three-month period from September through November 2016 to the same period in 2015 we see significant drops in buyer activity in the areas described above. (between 48% and 54% lower over the same three months).

How have prices been affected? While the benchmark price index for detached homes in the subject areas showed a small seasonal drop over the past three months (-2.7% in Vancouver West to -4.8% in Burnaby North). The November 2016 Benchmark Price still increased over twelve months in the 22% to 27% range.

So, will the government intervention have a lasting effect on home prices in Greater Vancouver? Will supply of homes for sale grow in 2017? As long as Canada continues to attract population growth people will prioritize their efforts to own a home for the benefit of their families. Canada is a very big geography and continues to build its population by welcoming immigration from around the world, just as it has from its beginning. Greater Vancouver is a desirable area for nearly all demographics. I believe buying activity here will remain strong based on the principles of a free market and supply / demand dynamics.

When you are thinking of selling your home, let us help you find the best possible Buyer.

Blog post provided by Ron Friense, a REALTOR® with Macdonald Realty in North Vancouver.


Visit Ron’s website at ronfriesen.ca for more information.