Westside detached house supply this March is up 5% from February (723 to 772) but is up 247% compared to 560 Mrach 2017. Westside detached home demand (sales) this March was about the same as February (52 to 53) and down 44% compared to 95 sales March 2017. This year, sales volumes are off 79% from sales in Feb. 2016 (pre foreign buyer tax).
The increase in supply has resulted in an increase in Months of Supply (MOS) to 14.6, from 13.9 last month and 5.9 last Mar. 2017. (Usually a balanced market is in the range between 4-5 & 6-7 MOS with prices rising below 4 MOS and falling above 7 MOS). At 14.6 MOS, prices continue to drop from $4.061M to $3.310M on average and from $3.459M to $2.980M on the median. This is down 27% on average & 23% on median from the highs in 2017. If demand stays low, MOS will stay high and that will continue downward pressure on prices.
The highest sale price for a Westside detached home in March was $12.98M. The lowest price was $1.80M. Of those sales, 6 received the asking price or more and 47 sold below the asking price.
Westside apartment supply increased 9% to 716 units in March from 654 in Feb. and this is up 12% from the 641 listings we had March 2017. Demand increased 5% to 349 sales in March from 332 in February 2018 but this is down 23% from 454 sales March 2017. MOS in Mar is 2.1 vs 2 in Feb and that is up from 1.4 last March 2017. These levels are low but they are trending up and this has caused prices to hesitate with the average falling 4% from $1.083M in Feb. to $1.035M in Mar. and the median dropping slightly
from $873K to $806K.
Westside townhouse supply increased 9% this March to 173 homes from 159 in February and up 36% from 127 in Mar. 2017.
Demand in March is down 11% to 39 units from 44 in Feb. but this is up 39% from the 64 sales last March 2017.
Supply up and demand down increases the current MOS to 4.4, up 22% from 3.6 in Feb and up 21% from 2 last Mar 2017. Notwithstanding this increase in MOS, average prices increased 10% to $1.575M from $1.431M in Feb. and were up 17% from $1.346M last Mar 2017. Median prices
increased 11% to $1.538M in March from $1.385M in Feb and this was up 4% from $1.476M last Mar 2017.
Detached house prices are at the lowest levels in the last two years and are now creating good buying opportunities. Apartment prices are showing the first signs of softening and increasing supply may sustain this trend. Townhouse supply is the highest it has been in two years and bodes well for buyers looking to downsize.
Real estate in Vancouver is facing challenges on many fronts. Two interest rate jumps in the last 8 months totalling 75 basis points have increase mortgage costs by 28%. This coupled with more stringent qualification requirements is causing many mortgages to be turned down and putting the brakes on buying.
Government taxation on foreign buyers, local buyers and current homeowners is also cooling demand as everyone stops to assess the effect on their personal financial situation.
Please consider that Vancouver is not an average city. It is exceptional and one of the top five cities in the world in which to live. Vancouver is surrounded on three sides by water & mountains. Density is our only solution and that makes each home very expensive. Not unlike San Francisco, Hong Kong, Sydney, New York & London, all of which make Vancouver look like a bargain.
It is time for a thoughtful consideration of our problems and some meaningful solutions. What we need to do, is to recognize the cost of; vacant homes in our community, the lack of transparency in home ownership, supporting families not paying income taxes in Canada, the Colossal Failure of Money Laundering Law Enforcement particularly in BC casinos, the lack of family sized apartments in the city, the use of Real Estate by criminals for parking and laundering profit from illegal activities, allowing equity lending to finance real estate purchases and so on and on.
The empty homes tax is encouraging occupancy and hopefully we'll see the cost benefit payoff soon. Enforcement may be an issue but we are on the right track. Knowing the beneficial owner of a property will help us ensure families benefitting from our society are paying tax to support that society. Preventing money laundering in casinos is fundamental to maintaining law & order. Making an incentive for developers to build 3 bedroom family friendly units will help keep families in our community. Giddy Up CRA. You should already be taxing profits from speculators, flippers and people assigning pre-sale contracts. Equity lending is not something useful for local buyers rather it's a tool for offshore buyers to borrow within our system that disadvantages our local buyers who need to qualify by their income for those same loans.
All of these issues need work, study & consultation not the taxation proposed by the NDP. This is a tax grab first & foremost that punishes all homeowners and does not encourage the development of affordable housing our community needs.
The new provincial budget is a direct attack on home owners with policy specifically designed to diminish property values in expensive neighbourhoods. Increased property transfer tax and a school tax surcharge will intimidate buyers, erode property values and do substantial damage to the equity of home owners in this area. These measures will make it particularly difficult for homeowners on fixed incomes to remain in their homes. Assessed values and the equity in our homes will fall while taxes increase.
We need to have the NDP reconsider their campaign to diminish real estate values and have them institute policies of a positive nature to encourage the development of affordable housing in our community rather than merely pay lip service to that goal.
Please call me at any time for a considered response to any and all of your real estate questions.
Stuart