market update Archives | Sibo Zhang Personal Real Estate Corporation

What a difference a month can make! As every sector of our economy is trying to cope with COVID-19 disruptions, there are many sources of pressure on the housing market. At the beginning of March, we were beginning to see a resurgence in demand for residential properties in Greater Vancouver. A stifled market after a lengthy period of onerous mortgage rules that had reduced demand had come to end. Buyers who had been waiting to see how low prices would go were now rapidly making offers in an optimal period of low interest and eased mortgage lending requirements. In the first two weeks of March, before the full COVID-19 effect was felt, residential sales across Metro Vancouver jumped over 17 per cent from the preceding month, reaching over 46 per cent higher than one year earlier. Then, just as quickly, a decline set in for the last half of the month – undoubtedly attributable to the precautions necessitated by the epidemic. At present, this unprecedented situation can only be monitored for its impact on the real estate market in the short term. While sophisticated statistical models can provide us with best- and worst-case scenarios, the spread of the virus is ultimately dependent on the behavior of people. However, there is optimism across our region that we are making progress in slowing the rate of infections through social distancing and other safety measures. Of course, this has impacted the ability of home seekers to attend open houses but there is still much you can do online and by phone. For this reason, I want to provide you with information that is useful during this challenging time.

If we are to consider the effect of the coronavirus on our housing market, we must focus on the timing of events. With the surge in demand in early March, we can see some larger than usual price increases beginning to take place. There was also a close to an 11 per cent increase in new listings in Metro Vancouver in March compared with February. This may be interpreted as a shift from a lengthy period of being a “buyers’ market” now transitioning to a “sellers’ market.” What this means is that the underlying demand of housing is pushing upwards and encouraging more people to put their property up for sale as prices rise. I have been advising home buyers to move quickly for the past couple of months, and I still encourage you to keep this market shift in mind. While Covid-19 may slow a rapid increasedue to the practical problems of visiting properties, it will not eliminate the underlying demand which has been pent up for a couple of years. Even with the slowing effect in the last half of March, the composite benchmark price for all residential properties in Metro Vancouver at the beginning of March was $1,033,700, a 1.3 per cent increase from February. Broken down to each property type, there month-over-month increase across the board: 1.2 per cent increase for detached homes; 0.9 per cent increase for townhouses; and 1.4 per cent increase for condominiums. In the comparative benchmarks below, you can see that prices in the past month far exceed the number of decreases.

Detached Homes

The benchmark price for a single-family detached home in Greater Vancouver at the end of March was $1,450,700, an increase of 1.2 per cent from the preceding month. The extremities of this average were Vancouver West (not West Vancouver) at $2,942,200 and Maple Ridge at $835,100. The three municipalities closest to the benchmark on the higher side of the average were: Burnaby North at $1,453,100 an increase of 2.4 per cent from the preceding month; Burnaby South at $1,493,500, an increase of 1.1 per cent from the preceding month; and Richmond at $1,522,800, an increase of 0.9 per cent from the preceding month. The three municipalities closest to the benchmark on the lower side of the average were: Vancouver East at $1,426,500, an increase of 1.3 per cent from the preceding month; Port Moody at $1,420,300, an increase of 0.6 per cent from the preceding month; and Vancouver East at $1,225,300, an increase of 2.5 per cent from the preceding month.

Townhouses

The benchmark price for a townhouse in Greater Vancouver at the end of March was $791,800 an increase of 0.9 per cent from the preceding month. The extremities of this average were Vancouver West (not West Vancouver) at $1,133,500 and Maple Ridge at $535,100. The three municipalities closest to the benchmark on the higher side of the average were: Richmond at $795,000 an increase of 1.4 per cent from the preceding month; Vancouver East at $893,300, a decrease of 1.2 per cent from the preceding month; and Vancouver West (not West Vancouver) at $1,133,500, an increase of 0.2 per cent from the preceding month. The three municipalities closest to the benchmark on the lower side of the average were: Burnaby South at $768,400, a decrease of 0.6 per cent from the preceding month; New Westminster at $749,000, an increase of 0.7 per cent from the preceding month; and Burnaby North at $727,700, no change from the preceding month.

Condominiums

The benchmark price for a condominium in Greater Vancouver at the end of March was $687,000, an increase of 1.4 per cent from the preceding month. The extremities of this average were West Vancouver at $1,027,600 and Maple Ridge at $359,700. The three municipalities closest to the benchmark on the higher side of the average were: Burnaby East at $678,900, an increase of 4.8 per cent from the preceding month; Vancouver West (not West Vancouver) at $810,800, an increase of 1.9 per cent from the preceding month; and West Vancouver at $1,027,600, an increase of 1.4 per cent from the preceding month. The three municipalities closest to the benchmark on the lower side of the average were: Burnaby South at $674,900, a decrease of 0.5 per cent from the preceding month; Port Moody at $671,900, an increase of 3.8 per cent from the preceding month; and Richmond at $655,200, an increase of 2.3 per cent from the preceding month.

Let me help

I am working hard to help my clients during this challenging time. I know many of you want to find a home while prices are still within your budget; if you need help navigating the new rules for eased mortgage stress testing; or if you are looking for the best mortgage for your financial capacity, please give me call. There is a lot we can do online and by telephone. I encourage you to visit my website for an extensive list of properties, prices, and areas. Together we can meet the challenges we are facing with COVID-19 and still manage your housing needs.

Please don’t hesitate to give me a call. (604) 779-7992

Thanks for reading!

Sibo Zhang, REALTOR®

November has announced that Winter is just around the corner. The noticeable drop in temperature is a good reminder to get prepared for the coming season; snow tires, Christmas decorations, maybe a short holiday to a warmer region. There are lots of things to do before winter rolls around.

Metro Vancouver

Another noticeable thermometer change of a different sort this November – with importance for home shoppers – was the big jump in residential sales last month. The Real Estate Board of Greater Vancouver reported that October’s sales volume was 7.1 per cent higher than September’s, and a huge 35.3 per cent higher than one year ago. In fact, last month’s sales volume was 15 per cent higher than the 10-year average for the month of October. However, there’s one prominent figure that has remained almost unchanged from last month – and very close to what it was this past summer: the composite benchmark price for all residential properties in Metro Vancouver. My monthly newsletter readers have been following my review of this benchmark price since it surpassed the $1-million mark in July this year. Since then, its rate of increase has really slowed down – a psychological threshold I have speculated – with the October price of $1,042,300 a mere 0.5 per cent higher than the preceding September bench mark price. And what is particularly interesting is that this rate of increase is exactly the same as the rate of decrease for the benchmark price of a detached property ($1,609,600) in the same month-over-month period. Now, that may well be just a curious coincidence, but it makes one suspect a hidden inverse correlation between detached properties and other types of residences in the current market. In other words, are homebuyers shifting from one housing type to another at this price level? If so, this would support my hypothesis of a price threshold for detached homes; and there was a similar increase in sales activity for both townhouses and condominiums in October.

The October benchmark price for apartments increased 1.0 per cent from the September 2017 price, to reach $642,000. The benchmark price increase for townhouses for the same period was 2.0 per cent, reaching $812,400. These prices are still attracting a lot of buyers. The inventory of available properties in Metro Vancouver in October was 9,137, a decrease of 3.5 per cent from September. Below I have selected some areas where the benchmark prices (as of October 2017) for apartments and condominiums – the market segment of interest to most of my clients – are currently recommended for viewing.

For apartments, I have selected four areas that are closest to the Metro Vancouver benchmark price of $642,000. Each of these areas has its own benchmark price above $600,000, providing prospective buyers with similar property characteristics in the same price range but in distinctly different geographical locations. As usual I have also indicated the most recent rate of price change from the preceding month. You can then narrow your search according to your preferred area to live. In South Burnaby the benchmark price was $664,200, which was the same price in the preceding month; in Burnaby East, where the benchmark price was $661,100, with a decrease of 3.1 per cent from the preceding month; in Port Moody, which had a benchmark price of $613,399 and a 2.0 per cent increase from the preceding month; and Richmond, where the benchmark price was $609,600 with a 1.6 per cent increase from the preceding month.

For townhouses, the benchmark price for Metro Vancouver was $802,400. I have again selected four areas closest to this price, excluding Whistler and West Vancouver because they are each over the $1-million threshold, and Squamish at 899,900, simply because most of my clients are looking for something closer to Vancouver. The four remaining areas are: North Vancouver at $977,000 with a 1.3 per cent increase over the preceding month; Vancouver East at $855,200 with a 0.2 per cent increase over the preceding month; Richmond at $800,000 with a 0.2 per cent decrease over the preceding month; and Burnaby South at 762,300 with a 1.9 per cent increase over the preceding month.

Fraser Valley

If you are in the market for a townhouse or condominium, the Fraser Valley is where I have been directing my readers for value properties at prices that are still within the range of first-time buyer budgets. Certainly, I can help you find a detached property if that is what you are after. The benchmark price in October for a single family detached home was $971,900, which is close to the benchmark price in Metro Vancouver, but still under the $1-million mark. So, if the same pattern holds for price increases as discussed above, the rate of increase may start slowing down soon. It will be interesting to watch if this pattern holds in the Valley as it has done in Metro Vancouver. However, the major sales focus in the Valley is still in the market segment for attached properties. This typically offers what young families are looking for in a townhouse, or for young singles just starting out with a condo. This is an excellent strategy for your longer-term living plans because you start building equity in owning a property. As your family may grow, and your work career develops, you will be in market in which you can move up in value if you like. This is a much more desirable position to be in than trying at a later stage to get into a market that is relentlessly pushing upwards in value.

But there is only one way to describe sales activity in the Valley – it is hot! This past October saw overall sales reach the second highest level in history, with an increase of 23 per cent over October 2016, and 11.1 per cent higher than September 2017. The attached sales were 56 per cent of all market activity with sales of condominiums reaching 591 units and townhouses at 418.

The October benchmark price for a Valley townhouse was $502,800 and for a condominium, $369,400. I have again selected some areas where I see some very good value at prices that are in the affordable range for my clients. I hope you will find the following selection a useful guide in your search for what you want. Each of my selected areas is as close possible to the benchmark price while remaining in the $500,000 range with the $100,000 increment for each benchmark price. I have also included the last month’s rate of change in the price for that area.

For townhouses, the October Valley benchmark price in North Delta was $579, 300 with a 0.8 per cent increase over the preceding month; Cloverdale at $562,700 with a 0.4 per cent increase; Surrey at $540,300 with a 1.2 per cent increase; and North Surrey at $510,600 with a 0.8 per cent increase.

For condominiums, the October Valley benchmark price in Langley was $379,100 with a increase of 2.9 per cent increase over the preceding month; Surrey, at $364,200 with a 3.8 per cent increase; North Surrey at $354,800 with a 3.2 per cent increase; and North Delta at $345,100 with a 3.6 per cent increase.

Please let me know if I can help you with any specific market questions. I am more than happy to crunch the numbers that can help you make the best decision for your home buying plans.

Thanks for reading!

Sibo Zhang, REALTOR®