Before the coronavirus pandemic paralysed the Canadian economy, the Vancouver real estate market was one of the strongest in the nation, with strong activity and rising prices. Like other major areas of the country, the city experienced a temporary slump at the height of the public health crisis as sellers waited out the chaos, and buyers sat on the sidelines. Since then, however, the city’s housing sector has significantly rebounded, with renewed sales activity and increasing prices.
According to the Real Estate Board of Greater Vancouver (REBGV), residential home sales across Metro Vancouver advanced 36.6 per cent in August compared to the same time a year ago. In total, 3,047 homes were sold, up from 2,231 in August 2019. The number of listings surged 55.1 per cent, from 3,747 in August 2019 to 5,813 in August 2020.
The median price for all residential properties – condominiums and houses – rose 5.3 per cent year-over-year to $1,038,700. This is also up 0.7 per cent from July.
Colette Gerber, REBGV chair, cited pent-up demand and low interest rates for the comeback in Vancouver real estate.
“People who put their home buying and selling plans on hold in the spring have been returning to the market throughout the summer. Like everything else in our lives these days, the uncertainty COVID-19 presents makes it challenging to predict what will happen this fall,” Gerber said in a news release. “Low interest rates and limited overall supply of homes for sale are creating competition in today’s housing market.”
There is a lot of uncertainty surrounding the health of Canadians over the next few months, primarily as the country enters cold and flu season, which has a lot of health authorities concerned. But, if the red-hot Vancouver housing market can withstand the eye of the storm, the West Coast city might emerge from 2020 unscathed.
Vancouver Real Estate: Projected Trends for the Fall Market
Real estate agents across Canada have been applauded for their work during the virus outbreak and national lockdown. They have been on call, utilising digital tools and adhering to public safety guidelines. Since real estate was deemed an essential service, realtors have been working diligently to ensure the housing sector did not suffer a serious crash. Should another outbreak surface in the autumn months, the industry will be prepared.
As Gerber noted, much uncertainty remains in the months ahead. Despite this, the Vancouver real estate market is still anticipated to expand, as not too many homebuyers are worried about a second wave, according to the RE/MAX Fall Market Outlook Report.
In the third quarter, it is projected that Canada’s third-largest city will see housing prices advance 3.7 per cent from the current $2,331,583 average residential sale price for a single detached property ($864,415 for a condominium or townhome).
“Overall, brokers and agents in Western Canada say the potential buyers they are talking to are not too concerned with a potential second wave of COVID-19 impacting their real estate journey, and RE/MAX brokers are estimating steady activity to round out 2020,” the report stated.
Borrowing costs will remain lower for long after the Bank of Canada (BoC) indicated that it would not raise interest rates until 2022 – at the earliest. The central bank cut rates by 150 basis points to 0.25 per cent earlier this year, and it recently reduced the five-year mortgage rate to below five per cent.
The present state of monetary policy could fuel the city’s luxury market, potentially transitioning into a sellers’ market. The numbers suggest that Vancouver is starting to witness an increase of move-up buyers rather than the foreign buyers who elevated demand in its luxury market before the coronavirus. Overall, Vancouver’s luxury niche could stay balanced for the rest of the year.
Could Vancouver Handle a Second Wave?
British Columbia is facing a resurgence in new COVID-19 cases. After being one of the first provinces to flatten the curve, BC is starting to see a triple-digit rise daily, which comes at a time when children are returning to school, and as more of parts of the local economy open up. For now, Provincial Health Officer Dr. Bonnie Henry does not believe a systemwide shutdown will occur again, something that should reassure every sector of the economy. But that does not mean the province should stop being vigilant.
Although agents are conducting more open houses, they are still applying the necessary health precautions, using hand-washing stations, and installing a visitor log for contact tracing. Many agents are also wisely embracing technology to help buy and sell properties, limiting in-person exposure. Based on the resilience this market has displayed over the past 6 months, many are hopeful that it will seamlessly endure the impacts of anther lockdown.