Return of First-Time Buyers Expected in Vancouver Condo Market This Spring

Softer market conditions prevailed throughout much of the year in the Greater Vancouver condo market as well as Fraser Valley, with fewer sales of condominium apartments occurring across the board in 2024, according to a new report from RE/MAX. In Greater Vancouver, year-to-date condominium apartment sales between January and August were well off year-ago levels at 9,248, according to Greater Vancouver REALTORS, down just over eight per cent from the same period in 2023. Neighbouring Fraser Valley reported just 3,130 condos changing hands between January and August of this year, down 8.5 per cent from year-ago levels. Values continue to climb in the Fraser Valley, where the overall average price year-to-date for apartment units is up two per cent year-over year ($559,215/$548,658) according to the Fraser Valley Real Estate Board, while Vancouver has edged up two per cent to $823,550 in 2024, compared to $807,085 in 2023.

Home-buying activity started with a bang in both Greater Vancouver and the Fraser Valley this year as the anticipation of interest rate cuts in April fuelled momentum. When it became evident that interest rates would hold steady until June or July, the wind was sucked from the market sails. Several areas in Greater Vancouver have reported an increase in year-to-date sales, including Port Coquitlam (263 sales in 2024 compared to 237 sales in 2023), New Westminster (546/544) and Whistler/Pemberton (186/180). Despite several interest rate cuts to date, however, buyers are still skittish, holding off on purchasing their home until rates decline further, while sellers are reluctant to list their homes for fear of leaving money on the table.

The catch-22 situation has been frustrating for buyers and sellers alike, but buyers who pull the trigger now on a purchase, may ultimately find themselves in a better position come spring. Selection is good with more than 2,100 apartments currently listed for sale in Greater Vancouver and another 2,080 available in the Fraser Valley, and buyers have the luxury of time to make thoughtful decisions. Come spring, the number of purchasers in the market is expected to increase, placing upward pressure on values.

Some of the most popular areas for condominium sales in Greater Vancouver in recent years are in East Vancouver. Its culturally diverse and artsy neighbourhoods, top-shelf restaurants and cafés, including Michelin Star Published on Main, as well as craft breweries and entertainment, have served to draw a younger demographic. False Creek, Mt. Pleasant, Kits Point, Fairview, Pt. Grey and Dunbar offer condo buyers a spectacular view of North Vancouver and the Burrard Inlet and easy access to the Skytrain, bike and walking paths, parks and recreational facilities. A one-bedroom apartment in an established building in Mt. Pleasant can be purchased for approximately $650,000, while newer product can be picked up for as low as $490,000 to a high of $928,000. Prices in nearby Kits trend higher with a one-bedroom hovering at $715,000 on average.

The lion’s share of apartment sales in both Greater Vancouver and Fraser Valley are occurring under the $800,000 price point for a one-bedroom apartment, while a two-bedroom priced below $1 million will generate solid interest. The Valley tends to offer greater selection under the $800,000 price point, and typically has more appeal with first-time buyers.

As demand rises in tandem with the Bank of Canada’s interest rate cuts, absorption levels should increase. Spring of 2025 is expected to be characterized by strong demand and dwindling supply, with modest increases in average price. Strong economic fundamentals going into the new year will support an increase in home-buying activity, with lower interest rates and longer amortization periods helping to draw first time buyers into the market once again.