The Real Estate Board of Greater Vancouver (REBGV) reports that residential home sales in the region totalled 1,870 in August 2022, a 40.7 per cent decrease from the 3,152 sales recorded in August 2021, and a 0.9 per cent decrease from the 1,887 homes sold in July 2022.
Source: REBGV
Last month’s sales were 29.2 per cent below the 10-year August sales average.
“With inflationary pressure and interest rates on the rise, home buyer and seller activity shifted below our long-term seasonal averages this summer. This shift in market conditions caused prices to edge down over the past four months.”
– Andrew Lis, REBGV’s director, economics and data analytics said.
There were 3,328 detached, attached and apartment properties newly listed for sale on the Multiple Listing Service® (MLS®) in Metro Vancouver in August 2022. This represents a 17.5 per cent decrease compared to the 4,032 homes listed in August 2021 and a 16 per cent decrease compared to July 2022 when 3,960 homes were listed.
The total number of homes currently listed for sale on the MLS® system in Metro Vancouver is 9,662, a 7.3 per cent increase compared to August 2021 (9,005) and a 6.1 per cent decrease compared to July 2022 (10,288).
“Home buyers and sellers are taking more time to assess what this changing landscape means for their housing needs. Preparation is critical in today’s market. Work with your Realtor to assess what today’s home prices, financing options, and other considerations mean for you.”
– Lis said.
For all property types, the sales-to-active listings ratio for August 2022 is 19.4 per cent. By property type, the ratio is 12.2 per cent for detached homes, 25.3 per cent for townhomes, and 24.8 per cent for apartments.
Source: REBGV
Generally, analysts say downward pressure on home prices occurs when the ratio dips below 12 per cent for a sustained period, while home prices often experience upward pressure when it surpasses 20 per cent over several months.
The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $1,180,500. This represents a 7.4 per cent increase over August 2021 and a 2.2 per cent decrease compared to July 2022.
Sales of detached homes in August 2022 reached 517, a 45.3 per cent decrease from the 945 detached sales recorded in August 2021. The benchmark price for a detached home is $1,954,100. This represents a 7.9 per cent increase from August 2021 and a 2.3 per cent decrease compared to July 2022.
Sales of apartment homes reached 998 in August 2022, a 38.8 per cent decrease compared to the 1,631 sales in August 2021. The benchmark price of an apartment home is $740,100. This represents an 8.7 per cent increase from August 2021 and a two per cent decrease compared to July 2022.
Attached home sales in August 2022 totalled 355, a 38.4 per cent decrease compared to the 576 sales in August 2021. The benchmark price of an attached home is $1,069,100. This represents a 12.7 per cent increase from August 2021 and a 2.5 per cent decrease compared to July 2022.
Reports indicate that business was brisk in Vancouver’s multifamily market as 2022 began, with private investors and vendors eager to capitalize on strong pricing.
This year’s Goodman Report states that 84 transactions totaled $1.26 billion in value and 11 percent fewer transactions than in 2021.
“Although this is down from the previous year, this result represents more volume than all of 2020,”
says the Goodman Report, noting that activity in the period was the third-highest since 2006.
In 2018, 89 transactions totaling $1.45 billion were completed in the first half of the year. With 87 transactions totaling $1.35 billion, 2017 was the second-best year for the first-half transactions.
82 percent of the market is estimated to be private investors, followed by 14 percent institutional investors, according to the Goodman Report.
“Private investors continue to make up the overwhelming majority of transactions in Metro Vancouver,”
according to the Goodman Report.
According to CBRE Ltd.’s analysis of Metro Vancouver and Vancouver Island, the picture is slightly different. Ninety percent of the market was estimated to be private buyers, while 61 percent was accounted for by private institutions. The number of smaller buyers accounted for just 29 percent of all purchases.
“The institutional activity is expected to continue as we see more amalgamation of multifamily apartment buildings by larger landlords attracted to the strong fundamentals of the BC multifamily market,”
said CBRE.
Photo credit: canva.com
59 transactions totaling $780.4 million have been analyzed by CBRE across the Lower Mainland, including the Fraser Valley. On Vancouver Island, portfolio sales were a minor factor in the market, accounting for only five transactions, primarily Starlight Group’s purchase of 13 properties from Raamco International.
Lack of product is the main challenge for potential buyers.
“There is still lots of capital looking to get into the multifamily market and there is less competing product in the market for investors to choose from,”
said Lance Coulson, executive vice-president of CBRE’s National Apartment Group.
The Lower Mainland’s redevelopment activity has been driven by sites purchased for redevelopment. In the first half of 2022, 16 transactions took place, according to the Goodman Report. The transactions in this period accounted for 20 percent of the total.
A $76 million sale of the Quilchena Gardens site at 4683 Arbutus Street was the largest transaction in Vancouver.
Burnaby’s 9380 Cardston Court and 4221 Mayberry Street were the two largest transactions outside Vancouver, both co-op towers.
In spite of the high prices, especially in Vancouver, the average price per suite declined 12 percent compared with 2021.
Last year, the average unit cost was $491,019, down from $434,419 this year.
Comparatively, the average price per unit during the first six months of 2018 was $494,723 and $408,413 in 2017.
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