Investing in a West Vancouver Condo has always been an attractive investment. The housing market in Metro Vancouver has seen many changes over the years. From the early 1980s, when interest rates were low, to the present, when interest rates have risen and demand for homes has grown. It is clear that the housing market in Metro Vancouver is on the rise, and we can expect higher prices in the future.
Demand for homes
Despite the recent surge in construction and demand, the supply of homes for sale in West Vancouver is still limited. Almost 90 percent of the community is zoned for single-family homes. However, a recent rezoning to allow for high-rise apartments on 50 acres of prime waterfront land has sparked a vigorous anti-development backlash.
The metro Vancouver housing market is in the midst of a new cycle. Economists predict that house price growth will slow down in the coming year. However, there is still a strong economy and consumer confidence. This should allow the market to continue its upward trajectory.
Millennials are expected to make a major impact on the Vancouver real estate market over the next few years. Eighty percent of millennials plan to buy a home in the next five years. This is a growing segment of the workforce and many millennials are opting to move to smaller markets.
A new report found that 30 per cent of homeowners live in dwellings that are unsuitable for their needs. The report also found that 60 per cent of renters are living in unsuitable dwellings. These findings are part of the larger housing-needs report produced by the district.
The average detached home sale price in the Vancouver area increased 6.4 percent over the previous year. It’s also one of the most expensive detached home markets in the country.
The Vancouver housing market is in a buyers’ market. The supply of available homes is significantly below the long-term trend. The demand for homes is also slightly above the normal level. However, inflated prices put pressure on renters. This means more renters will need to find alternative housing.
Supply and demand
Despite the strong sales volume in the first half of 2021, sales are expected to slow down in the second half of the year. This is mainly due to a number of factors. The economy is still uncertain, the housing market is sales constrained, and interest rates are increasing. This is affecting buyers’ budgets, and many are now reassessing their budgets.
The supply and demand of West Vancouver condo prices is expected to remain relatively stable. The city’s condo market is mainly driven by retirees and downsizers. However, a new tax on foreign buyers might have a minor impact on the prices of these homes.
The price of a benchmark Vancouver home has tripled in the past two decades. A benchmark apartment has reached $835,500, while a benchmark townhouse is priced at $1.312 million.
The average price of a detached home in the city has risen 3.2 per cent over the past 12 months to $2,477,100. This is the highest price for a detached house in the Greater Vancouver area since 2006.
West Vancouver detached home sales dropped by 14% from the previous month. This is a sign that the market may be in its most vulnerable state. Currently, the detached home sales to new listings ratio in the city is around 10%. This may indicate that there are not many new listings available for sale in the city.
The housing market in the Greater Vancouver region has been under pressure for the past two years. Many municipalities are not building enough homes to meet demand. The government has encouraged them to speed up permitting. This could help alleviate the supply-demand imbalance.
Housing market forecast for higher prices in Metro Vancouver
Despite recent slowing in the sales market, the Vancouver housing market is still forecasted to continue rising in prices. This is thanks to the strong economy and a growing population. However, housing prices in Metro Vancouver are still not at the same levels as they were in previous years.
Prices are expected to rise 3.1 per cent this year to $1,225,000, and fall 2.9 per cent in 2023. Increasing costs will make homes more affordable, but they will also have a negative impact on high-priced markets.
The housing market in Vancouver, BC has exploded in recent months. There are more buyers in the market than sellers. This can help to avoid bidding wars. However, the supply of homes in Metro Vancouver is still relatively low.
Despite the housing market forecast for higher prices, affordability is still a challenge. In addition, the housing market is constrained by the amount of sales.
Currently, the proportion of home types sold is shifting from majority of higher-priced homes to majority of lower-priced homes. This is because soaring mortgage rates have reduced choices for seller-buyers. But, it is also a cultural trend. Many buyers will be priced out of the market. However, there are also a number of factors supporting confidence, such as the post-pandemic euphoria and the provincial labour market.
Economists also point to a growing economy, strong consumer confidence and low interest rates. However, some also warn that the current level of growth may not be sustainable. They also point to rising interest rates, which will have a negative impact on housing prices in expensive metros.
There are also several factors that may cause prices to fall in the second half of 2022. One of these factors is a new tax on foreign buyers. While the tax will have a negative impact on high-priced buyers, it will have a minimal impact on lower-priced homes.
Interest rates have doubled since the 1980s
Despite the rosy outlook for the economy, the Bank of Canada is expected to hike interest rates this summer. This would have a significant impact on Canadian homeowners’ finances.
While Vancouver was among the first cities to catch extreme housing speculation, the trend has spread to smaller cities. It’s not just Vancouver’s real estate market that’s being affected by the rising cost of borrowing. The Bank of Canada’s Overnight Lending Rate hit 1.5% in March, a significant increase from 0.25% last September.
One of the most significant effects of the rising interest rate is that it’s effectively doubled the financing costs of developers. That means fewer affordable housing units are being built.
CMHC estimates that up to 34 per cent of tenants in Vancouver have already crossed the affordability red line. While the government has hinted at other rental building incentives, it has stopped short of supporting the land banking proposal of Vancouver Mayor Mike Harcourt.
CMHC’s outlook for the year predicts that prices will slow down a bit in the next few years. The Bank of Canada is expected to hike rates three more times before year’s end.
The Bank of Canada isn’t the only one that’s feeling the pinch. The federal government is also looking at ways to address the affordability issue. Earlier this year, Ontario introduced a no-interest loan scheme for rental developers.
The Canadian housing market started to show signs of life after a three-to-four-year slumber. The average home price in the country rose 60% over the last five years, according to CMHC.
The average detached home in the greater Vancouver area went for $110,000 in 1980, but is now worth $1.1 million. The MLS benchmark price for all residential properties in Metro Vancouver ended in 2021 at C$1.23 million.
Sub-markets of Metro Vancouver have fewer monthly transactions
Despite a strong start to the year, the Metro Vancouver housing market continues to moderate. This week, the Real Estate Board of Greater Vancouver released its latest statistics. It reports that the overall residential sales market in Greater Vancouver was 12% higher than last year. The number of active listings also increased, which indicates that the market is adjusting to overarching financial pressures.
Single-family detached homes sales were 29.5 per cent higher than last year, and condominium sales were 5.6% higher. The benchmark price of a condo in the region was up one per cent from January, while the benchmark price of a single-detached home was up 1.1 per cent. The composite benchmark price for all home types in Metro Vancouver was up 0.8 per cent in December.
The number of new listings in February was the highest in eight months. New listings averaged 251 per day in the first week of the month. New listings were 15% higher than last year’s 10-year average.
While prices are up in all major sub-markets, prices are down in some smaller ones. This includes the Fraser Valley, where prices were up 1.5 per cent from January to February. The West Side, Tsawwassen, and Coquitlam are among the sub-markets where prices have been declining.
The West Side and Ladner are among the top sub-markets where annual price declines have been strongest. Among the five areas with value at or above one year ago, the East Side was the only one to see value hold.
The townhouses have seen the largest benchmark price recovery since last summer. The benchmark price for townhouses in the region has been up 1.1 per cent over the past month and 0.7 per cent higher than last year.
Among many other things, David A. Grantham is a contributing author to UmassExtension West Vancouver Blo. He is a renowned expert on real estate in BC.
Born in North Vancouver, Louisiana, Dr. Grantham grew up in Lower Lonsdale. He then went on to complete his business degree at the University British Columbia. As of this writing, Grantham has completed over 100 projects, including the development of a high rise building in Vancouver.
He is a husband, father, son, brother, and friend. He was a dedicated outdoorsman and enjoyed sports such as hunting, fishing, scuba diving, and snow skiing. His wife, Alison Grantham, and their two daughters survived him. He is survived by his wife Alison Martin Grantham and two daughters.