Vancouver Real Estate Market In Full Retreat
Each month is starting to look worse than the previous one for Canada’s most expensive housing market as property sales in July dropped 11.2% from June — marking a decade low for activity.
The news for Vancouver comes on the same day another report
questioned whether Toronto’s new condominium market may finally be
cooling. Urbanation Inc. noted sales in the country’s largest city were
off 21% in the second quarter from one quarter earlier.
“It’s a pretty slow market,” said Phil Soper, chief executive of Royal LePage Real Estate Services, in describing Vancouver housing sales. “It’s always been a volatile market. This is cyclical result of stretching affordability or overshooting price.”
Mr. Soper said some of the foreign investment has cooled in the market and it’s still not clear whether low mortgage rates will have enough of an impact to pull the market back.“I think if people sense a potentially softening in prices, they might step back in and if there is a sign of economic resurgence and increased interest from China and Hong Kong,” he said.
For now the Real Estate Board of Greater Vancouver reported the worst July since 2000, and 31.2% below the 10-year average for the month of 3,051 sales.
The board said there were 2,098 residential property sales of detached, attached and apartment properties in July — off 18.4% from a year ago.
Prices continue to hold with the board saying the composite benchmark price for all residential properties in Greater Vancouver rose 0.6% to $616,000 from a year ago but dropped 0.7% from June.
New listings hit 4,082 in July which is the lowest number of new listings for any month in 2012 and a 5.8% drop from July 2011. It was also a 14.5% decline from June.
Despite that drop, there were still 18,081 active listings in the month, which is an 18.8% increase from a year ago and a 2.2% increase from June. There is little doubt Vancouver is now a buyer’s market, according to many realtors.
“With a sales-to-active-listing ratio of 11.6%, conditions have favoured buyers in our marketplace in recent months,” said Mr. Klein. “That means buyers have more selection to choose from and more time to make a decision. For sellers, it’s important to price properties competitively.”
By property class, detached home sales dropped 28.4% in July from a year ago. The benchmark price for detached properties increased 1.4% from July 2011 to $950,200 but dropped 1.2% from a month ago.
Apartment properties sales were down 10.9% in July from a year ago. The benchmark price of an apartment property was unchanged from the $374,300 a year ago and down 0.5% from June.
Meanwhile in Toronto, consumer taste seems to be switching to larger existing apartments from new condo units which have shrunk in size because of land costs.
Urbanation noted there were 5,050 condominium apartment resale transactions in the second quarter of 2012 which was a 30% jump from a quarter earlier and a 9% increase from a year ago.
Developers have been shrinking unit sizes in recent years to keep them affordable for buyers and to produce easily rentable suites for investors, said Ben Myers, vice-president of Urbanation. “However, there finally appears to be some resistance to these smaller suites.”
Urbanation said 4,769 condos sold in the second quarter, down from 6,070 in the first quarter of 2012, a record for a three-month period.