SUMMER SEES HOME LISTING SUPPLY DECLINE ACROSS METRO VANCOUVER
While home buyers have remained active in Metro Vancouver throughout the summer, the supply of homes for sale has declined steadily since June.
The Real Estate Board of Greater Vancouver (REBGV) reports that residential home sales in the region totalled 3,152 in August 2021, a 3.4 % increase from the 3,047 sales recorded in August 2020, and a 5.2 % decrease from the 3,326 homes sold in July 2021.
Last month’s sales were 20% above the 10-year August sales average.
"August was busier than expected, and listings activity isn’t keeping up with the pace of demand. This is leaving the market under-supplied." Keith Stewart, REBGV economist
There were 4,032 detached, attached and apartment properties newly listed for sale on the MLS in Metro Vancouver in August 2021. This represents a 31% decrease compared to August 2020 and a 8% decrease compared to July 2021.
The total number of homes currently listed for sale on the MLS® system in Metro Vancouver is 9,005, a 30% decrease compared to August 2020 and a 9% decrease compared to July 2021.
“Housing supply is the biggest factor impacting the market right now. To help relieve pressure on prices and improve people's home buying options, the market needs a more abundant supply of homes for sale.” Stewart said. “Housing affordability has been a key issue in the federal election. We encourage the political parties to focus on policy solutions that will help streamline the creation of more diverse housing options for hopeful home buyers today and into the future.”
For all property types, the sales-to-active listings ratio for August 2021 is 35%. By property type, the ratio is 25% for detached homes, 52% for townhomes, and 39% for apartments.
Generally, analysts say downward pressure on home prices occurs when the ratio dips below 12% for a sustained period, while home prices often experience upward pressure when it surpasses 20% over several months.
“When assessing the market, it’s important to understand that while year-over-year price increases have reached double digits, most of the increases happened three or more months ago,” Stewart said. “To better understand the latest home price trends in your preferred location and home type, talk with your local REALTOR®.”
The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $ 1,176,600. This represents a 13% increase over August 2020 and a 0.1% increase compared to July 2021.
Sales of detached homes in August 2021 reached 945, a 14% decrease from the 1,095 detached sales recorded in August 2020. The benchmark price for a detached home is $1,807,100. This represents a 20% increase from August 2020 and a 0.3% increase compared to July 2021.
Sales of apartment homes reached 1,631 in August 2021, a 22% increase compared to August 2020. The benchmark price of an apartment property is $735,100. This represents a 8% increase from August 2020 and a 0.2% decrease compared to July 2021.
Attached home sales in August 2021 totalled 576, a 7% decrease compared to August 2020. The benchmark price of an attached home is $952,600. This represents a 17% increase from August 2020 and a 0.3% increase compared to July 2021.
A MARKET OF EXTREMES: NEAR-RECORD SALES IN AUGUST COMBINED WITH LOWEST SUPPLY IN FOUR DECADES
Demand for Fraser Valley real estate remained elevated in August reaching the second-highest sales ever for the month against a backdrop of decreasing supply.
The Board processed a total of 2,087 property sales on its Multiple Listing Service® (MLS®) in August, an increase of 4% compared to July and a 2% increase compared to the same month last year. Sales remained unusually high for the month; second only to August of 2005.
Larry Anderson, President of the Board, said, “Homebuyers are facing one of the worst supply shortages in Fraser Valley history. Our sales are over 30% above normal, while our housing stock is at levels last seen in the early 80s. “To put our supply and demand situation in perspective, for every 100 townhomes on the market in August, Fraser Valley REALTORS® sold 94. The single-family detached and condo markets also remained in strong seller’s market territory. Persistent demand and lack of supply continue to put upward pressure on home prices.”
In August, the Board received 2,107 new listings, a decrease of 36% compared to last year, and a decrease of 13% compared to July 2021. The month ended with total active inventory sitting at 4,077, a 17% decrease compared to July, and 45% fewer than August 2020.
Baldev Gill, Chief Executive Officer of the Board, added, “To improve affordability, the BC government introduced the foreign buyers’ tax in 2016 and the federal government introduced the mortgage stress test two years later. And yet, in the last five years, the price of a typical detached home in the Fraser Valley has increased by 50%. Those measures did not address the core issue, which is insufficient supply to meet the rise in our population growth. All levels of government must work together to correct the structural housing shortage.”
MLS® HPI Benchmark Price Activity
• Single Family Detached: At $1,336,800, the Benchmark price for an FVREB single-family detached home increased 1% compared to July 2021 and increased 31% compared to August 2020.
• Townhomes: At $697,500, the Benchmark price for an FVREB townhome increased 1% compared to July 2021 and increased 24% compared to August 2020.
• Apartments: At $498,800, the Benchmark price for an FVREB apartment/condo increased 1% compared to July 2021 and increased 14% compared to August 2020.
Historically low inventory in the Vancouver Island Real Estate Board (VIREB) area continues to plague potential buyers and hamper sales. Active listings of single-family homes and row/townhouses are 50% lower than in August 2020, while VIREB’s inventory of condo apartments dropped by 61% year over year.
There were 891 unit sales in the VIREB area last month, down 18% from one year ago. By category, 460 single-family homes sold in August, up by 2% from July and down by 15% year over year. August saw 101 condo apartment sales compared to 102 the previous year and 124 in July. In the row/townhouse category, there were 91 sales last month compared to 104 in August 2020 and 99 in July 2021.
“Sales would undoubtedly be higher if there were adequate inventory,” says Ian Mackay, 2021 VIREB President. “Further, because the real estate sector is driven by supply and demand, we expect that prices will continue to rise unless demand drops or listings increase.” Mackay says that with a fall election on the horizon, VIREB is encouraged by the major parties’ focus on housing affordability. “However, without a tangible plan to build more homes, we’re concerned that election promises will fall far short of what’s needed and do little to improve affordability,” adds Mackay.
VIREB believes that the levers of delay developers face at the local level impede new construction and are significant barriers to increasing housing supply. BCREA, VIREB, and other real estate boards continue advocating with policymakers at the provincial and regional levels to speed up the development process so that municipalities can expand supply more quickly to meet demand. “Building more homes isn’t the easy solution, but it’s the key to making housing more affordable,” states Mackay.
The board-wide benchmark price of a single-family home reached $740,900 in August, up 33% year over year and slightly higher than in July. In the apartment category, the benchmark price hit $390,200 last month, a 3% increase month over month and up by 27% year over year. The benchmark price of a townhouse rose by 31% from the previous August and by 1% from July, climbing to $569,900.
In Campbell River, the benchmark price of a single-family home hit $650,800 in August, up by 33% from the previous year. In the Comox Valley, the year-over-year benchmark price rose by 32% to $772,800. The Cowichan Valley reported a benchmark price of $733,600, an increase of 32% from August 2020. Nanaimo’s benchmark price rose by 29%, hitting $741,900, while the Parksville-Qualicum area saw its benchmark price increase by 35% to $863,800. The cost of a benchmark single-family home in Port Alberni reached $492,400, a 43% year-over-year increase. The benchmark price for the North Island rose by 52%, hitting $394,400 in August.
Note that you may have to refresh the screen a few times until all the reports come up. This is a problem with the Real Estate Board website.
Below is a link to a graph showing the rise in prices in the Lower Mainland just for resale properties (no new homes) over the last year. This link is live so it will update when the new statistics come in each month. LINK to live graph
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