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The Captivating Side of Vancouver’s Real Estate Market and Current Trends

Vancouver is the highest populated city in Canada. It’s classified as the top-five global cities with a good and affordable quality of life. It was ranked top 10 in the world’s most well-living towns and. This article reports the latest real estate statistics in Vancouver. It also provides an extensive analysis of all the real estate news and trends.

Vancouver’s real estate news economic trend has been forecast to grow to 2.5% in 2018. This shows an upward direction from recent years. From recent surveys in Canada, there’s a high investor demand and redevelopment opportunities expected to take place. However, most investors and regional developers expect an increase in interest rates, and it impacts on the policy changes. This will lead them to be more reserved or conservative in 2018. Due to this, the industrial veterans plan on preparing for a turnaround by:

  • Being more choosy and not in a rush in making their portfolios
  • Efficiency in operations
  • Holding off acquisitions by maintaining the present state of affairs
  1. National Market Stats

Vancouver shows a favorable real estate market. Looking at the recent months, home buyers have been less active thus leading to a significant drop in the prices of all housing types. This is the best time for buyers to purchase houses since there are more choices to choose from. Also, the competition is less as compared to the market in the recent years.

  1. E-commerce Growth

There has been an evident an noticeable expansion in the country’s logistics and distribution sector due to the drastic industrial growth in Vancouver. This follows an initiation for creation for more industrial space. The increase in automated warehouses and centers of distribution has led to increased demand for facilities that are highly wired.  In conclusion to this, the future demands development of more industrial space to meet requirements of the e-commerce driven continent.

  1. The Retail Sector

The rapid growth in online shopping and consumers has greatly and continuously impacted Vancouver’s retail sector. This has created another perspective/picture for retail property across the country. The most critical success factors for retail property owners and investors will be based on flexibility and creativity. Retail centers must upgrade their shops to be areas that can not only provide shopping needs but also:

  • Have a variety of other services
  • Building public spaces
  • Having cultural programs
  • Having events etc.
  1. The Condominium Sector

In future, the condominium sector is said to perform and with high demand in most markets steadily. In the downtown of Vancouver, the condo units are attractive to young professionals. However, the retiring employees prefer living close to the urban centers enjoying their more carefree condo. In conclusion, the condo sector is evolving in alignment with the demand and new needs.

  1. The Single-family Residential

In 2018 the country’s economy has been forecasted to grow to only 2%. This growth is expected to force most Vancouver residents to buy new homes. Compared to the year 2000, the number of built homes has also increased by more than half, since 2-3 dwellings are constructed currently by multi-family.

  1. Rental Properties

Most built rental properties are seen to be performing well in Montreal, Quebec City, and Halifax. However, it is noted that, in Vancouver, more rental properties are being built, but emerging taxes and regulations are a significant challenge for them Quebec residents mostly look for desirable places, and they prefer moving to centrally located houses near their workplace. Halifax also records a large number of condo stock ordered online, but a significant cost advantage is noted in rental offers.

Do you know

AirBnB is implementing new government tax starting October 2018? This is what some AirBnB owners in BC have received in the past few days.

 

CURRENT TRENDS AND DEVELOPMENTS

  1. Government Policies

Government policies will have an impact on the affordability of houses. They will not only solve the problems at hand, but they will create merging problems. As most Vancouver residents think of their housing expectations, other cities are making great milestones in densification projects.

Some of its regions demand that the government needs to address House affordability as a serious issue. Others are of the opinion that the approved projects take too long and are also too expensive. In the short term, the supply of houses could increase significantly when municipalities fasten the process and reduce fees as well.

According to a monthly report done in August 2018, the demand for homes decreased significantly by 36.6%, as compared to August 2017. Also, a 6.8% decline is observed in August, as compared to July.

  1. Emerging Technologies

Technology always has a high impact on our daily lives and day to day activities. Technology and data has helped real estate companies in Vancouver;

  • Make better and well-thought decisions
  • Understand their customer needs
  • Identify new and profitable opportunities
You may review annual comparsion (Aug 2017 vs Aug 2018) here

Data and technology are being used by real estate companies in Vancouver to make better decisions. Companies should be willing to invest in modern IT equipment and data infrastructure to help them run effectively. Also, companies should, therefore, make sure that they hire the right people with the professional skills to interpret the data and ask the right questions.

  1. Affordability of Detached Homes in Vancouver
metro vancouver housing gap
metro vancouver housing gap

Most Vancouver residents earn an average income. This being the case, recent reports by real estate portal Zoocasa, shows that purchasing a detached house across Vancouver is highly unaffordable. However, this could be affordable for someone who has an extra source of income.

Zoocasa checked a report from August’s detached home’s prices, and the least income necessary to buy such property based on a 20% deposit. The expected income was then compared to the actual average income per household in each area. This was all in efforts to get the local house-cost to the income gap.

Below is an info-graphic chart showing the ranks of various Vancouver regions stating the income required to purchase a detached house, from the least to the most affordable:

From the info-graphic income gaps reports above, Vancouver West was seen to have the highest price of detached homes with a figure of $2,832,600. It’s then closely followed by West Vancouver with a higher income gap, and then Richmond falling in the third place with a lower income.

West Minister who takes 13th place out of 21 areas, also showed a report showing a gap of $92,810 between the average incomes to the income required to buy a normal house. Also, cities like Maple Ridge are seen to strain still to obtain an average income that should be more than $34K less, required to buy a normal house.

Conclusion

It’s important to note that although Vancouver Real Estate is expected to lead all Canadian cities with 2.5% in GDP, every real estate market has its problems and opportunities.

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Bursting Vancouver Real Estate’s Bubble: Are We There Yet?

The latest statistics from the Greater Vancouver Real Estate Board reveal that the benchmark cost of a single detached home in Vancouver is up nearly 40% from just over a year ago. This rapid ascent has drawn the attention of retired master hedge-fund manager, Marc Cohodes. In a recent interview, Cohodes tells Global BC News Morning that he believes members of the real estate industry are using “chinese money to keep the market propped up” as part of a money-laundering scheme that Cohodes says can’t last.

Real Estate Bubble
Source: Huff Post Business Canada

Foreign Investment: Myth or Reality?

According to the Global News article about Cohodes, not everyone agrees that the influx of foreign money is due to criminal activity. However, many do agree that foreign money is a signification contributor to the high-flying real estate prices here in Vancouver. To put this belief to the test, the government of British Columbia launched a study in June to begin tracking real estate investments in the province by foreign nationals.

Initial results from the study show the dollar value of foreign investment in residential real estate between June 10 and June 29, 2016, averaged slightly over 5% province-wide. Foreign transactions represented slightly over 3% of all MLS property transfer transactions during that same time period. This indicates that the average amount per transaction is higher for foreign buyers than Canadian citizens and permanent residents. In Metro Vancouver, the total value of investments from foreign nationals was over $350 million, or 6.5% of the total investments made during the first 19 days of the study. The highest concentrations of foreign investment were found in Richmond with a 14% rate.

Across the province, 258 transactions involved Chinese nationals, which was 76.6% of all foreign national transactions. More data and details are available in the Housing Market Information Release on BC MLS Home Sales issued by the Ministry of Finance. The Ministry report indicates that new housing units are in development throughout the province. However, these developments take time. Meanwhile, the housing market remains tight. In addition, more voices lately have been calling for a tax on foreign real estate transactions. Will these factors finally burst the real estate bubble as Cohodes predicts? And if so, when?

Vancouver Condo and Detached Home Buyers Pushed to New Heights

While we wait to see what the future holds, those who want to own a home in Vancouver today are faced with steep prices and limited selection. From single-family homes to luxurious condos in Yaletown, local buyers are feeling the effects of the pricing bubble.

The Real Estate Board of Greater Vancouver reports that June residential property sales totaled 4,400 transactions. This is slightly down from May; although, higher than same-month sales last year. Looking at historical records demonstrates that houses are still moving despite the higher prices. June 2016 ranked as the highest-selling June on record, at 28.1% above the 10-year sales average. Total listings for the four-month period from March through June have also reached an all-time high.

line-up-of-close-to-60-people-langley-condo-sales-centre
Picture of people waiting in line for days to buy a new condo in Langley back in May, 2016. Source:cbc.ca

Despite an increase in listings, supply has not exceeded demand and prices for both detached and attached residential properties continue to climb. The REBGV announced that benchmark prices for attached units in June 2016 increased by 28.1% from June 2015 prices. However, this rate remains lower than the 38.7% increase in detached properties.

 

Regardless of who is investing in Vancouver’s real estate, those who work in the city still need a place to live. So what is a prospective home buyer to do? As the saying goes, “location, location, location.” Look for properties that are located in sought-after areas that will hold their value, such as a Vancouver downtown condo. In particular, the thriving community and close commute make Yaletown condos a good bet during tumultuous times. If you are in the market for a new home here in Vancouver, contact Condos in Yaletown. We can show you the best real estate the city has to offer and help you choose how to invest your real estate dollars effectively.  

 

 

Real Estate in the Greater Vancouver Overview – June 2016

june-2016-vancouver-real-estate
Source: GVRB