Metro Vancouver Resale Market 'Balanced', Risk Of Bubble Subsiding: Conference Board Reports
Metro Vancouver's resale housing market has moved into a “balanced” range where neither buyer nor seller have any particular advantage in negotiating a sale, according to a Conference Board of Canada report released Tuesday.
As well, the report's author said in an interview about the board's metro Resale Index – November 2011, there's no longer a threat of a real estate bubble forming in the region.
“The threat of a bubble has largely dissipated,” senior economist Robin Wiebe said of Metro Vancouver. “But, really, there never was one.
“When prices rise, new supply is attracted to the market. And that's what's happened.”
According to the index, the average price in Metro Vancouver was $774,000 in October, two per cent more than September and 15.3 per cent more than October 2010.
As well, the number of listings stood at 60,600 in October on an annualized seasonally adjusted basis, which was 2.5 per cent less than September but 14 per cent more than October 2010.
The total number of sales in October – also on an annualized seasonally adjusted basis - were 30,792, up two per cent from September and 0.8 per cent from October 2010.
The Fraser Valley was in a balanced market, with prices up 9.6 per cent year-over-year to $494,000, but Victoria was considered a buyers' market, with prices down 7.1 per cent year-over-year to $490,000.
Wiebe said there is now adequate supply and reasonable demand in Metro Vancouver, meaning that a balanced market exists.
He said that rapid average price growth in May and June, fuelled largely by sales of expensive homes in exclusive neighbourhoods, is no longer a major factor in Metro Vancouver, with sales of the expensive homes having moved through the system.
“Price growth [year-over-year] in the last two months has been pretty good, but at 14.5 per cent it's a way down.”
He said with prices rising about 20 per cent year-over-year in May and June, a lot of people put their homes on the market, hoping to cash in.
“It changed the market balance a bit. Sales have cooled, listings have gone up. So the market balance has shifted. It's not surprising.”
Nevertheless, Wiebe said, the number of sales are reasonable by historic standards.
Nationally, sales were up in 17 of 28 markets from September to October, and new listings rose in 16 of 28 markets.
A total of 23 of markets were considered balanced, while four were a buyers' market. Listing shortages made Thunder Bay the only sellers' market.
As well, average values rose between September and October in 16 areas.