This month’s Real Estate Board of Greater Vancouver (REBGV) headline states that the Metro Vancouver housing market sees typical spring activity in April. The numbers may be typical but the reality is there have been two markets at work: the domestic market and the Asian market.
The REBGV reported that residential property sales of detached, attached and apartment properties in Metro Vancouver reached 3,225 in April 2011, an 8.2% slide compared to the year before and a 21% drop compared to (March 2011). With prices and competition ballooning upward once again, it is understandable that buyers are pulling back and not engaging with the market.
Rosario Setticasi, REBGV president stated, “While it continues to be a seller’s market in Greater Vancouver, last month’s activity brought greater balance between supply and demand in the overall marketplace[.]The year-over-year decline in April sales can be attributed to a less active condominium market on our MLS®, as there were more detached and townhome sales this April compared to last year.”
The changes are attributed to a few observations. The first is that the Asian (mainly Chinese) buyers have focused on purchasing detached properties (with a view towards immigration and a safe place to secure their money). The second observation is that, with the economic downturn, fewer new condos have come to the market this year, and the glut of extra inventory has been absorbed by the market, to a degree. Many first time buyers who were on the fence made their move last year; in part this was due, to record low interest rates.
There were 5,847 new listings for detached, attached and apartment properties in Metro Vancouver, in April 2011. Compared to last April’s all-time record, that is a 23.5% drop. Comparing this April to March 2011, we again see a 14% decline. It is hard to compare a relatively average year to a record-setting year and not have it seem like a let- down; but, in fact, things are holding relatively steady.
At 14,187, the total number of residential property listings on the MLS® edged up 8.2% during April compared to March, but fell 10% from this time last year.
Setticasi also made a good point, indicating, “[t]here’s considerable variation in activity within the communities in our region. This is causing home price trends to differ depending on the area[.]” He is quite right, the market is responding differently across many different types of homes (as the numbers above indicate) and areas, so it is important not to apply a broad brush approach to the market as a whole.
The MLSLink® Housing Price Index (HPI) benchmark price for all residential properties in Metro Vancouver glided up 5% to $622,991 in April 2011, from $593,419 the year before.
Sales of detached properties on the MLS® were 1,402, an increase of 2.3% over last year and up 17.8% from April 2009. The April 2011 benchmark price for detached properties also jumped 7.4% to $879,039.
Sales of apartment properties were 1,201, a drop of 21.3% compared to April 2010; however, this was an increase of 1.9% compared to April 2009. The benchmark price of an apartment property increased to 409,242, up 2.9% in April 2011 compared to the year before.
Attached property sales (or townhouse sales) were 622, a small increase of 1% compared to April 2010, and a 4.7% rise when looking at the 2009 numbers. The benchmark price of attached units rose 2.4% to 514,670 between 2010 and 2011.
Overall, the market seems to be following along relatively close to economic forecasts of around 3% growth for 2011, with the exception detached houses due to the large demand from Asian buyers.