The Vancouver real estate market was already in a state of correction when the 15% foreign-buyer tax was implemented. In fact, the market started to slow and correct in mid-June of this year. Sales for the month of July and August have dropped and inventory has increased.
2016 Monthly Absorption Rates
Detached Single Family Houses
| Area | May | June | July | August |
| Vancouver West | 36% | 27% | 18% | 11% |
| Vancouver East | 49% | 33% | 21% | 14% |
| North Vancouver | 65% | 82% | 11% | 8% |
| West Vancouver | 27% | 19% | 11% | 8% |
Condo/Townhouse
| Area | May | June | July | August |
| Downtown | 86% | 95% | 53% | 42% |
| Vancouver West | 83% | 80% | 64% | 51% |
| Vancouver East | 92% | 100% | 89% | 65% |
| North Vancouver | 100% | 100% | 88% | 62% |
| West Vancouver | 89% | 49% | 36% | 41% |
Absorption rate is calculated by taking the number of homes that sold in a month and divide it by the total number of homes for sale at the end of the month.
0 – 14% Buyers’ Market
15% – 20% Balanced Market
21% & Greater Sellers’ Market
In my opinion, the market needed to slow and correct. The level at which the market was increasing was not sustainable. The next four months will be a good indication on where exactly the correction is headed. Continually collecting and reading the current data is critical in today’s Vancouver real estate market. The next four months will provide key data on where the market is shifting. It is important to note that certain sectors of the market are still busy and even with prices off from May of 2016 real estate in Vancouver remains at unprecedented levels.
Vancouver has changed significantly since I started selling real estate in 1987. My client list for the year of 2016 has included families from London UK, USA, and Europe. Our Vancouver market is now global and the city is going through some growing pains. Vancouver real estate has always gone through cyclical ups and downs and the correction we are witnessing now may just be a healthy one because prices were getting far too heated.
Is the Vancouver Real Estate Market in a Bubble That is About to Burst?
I am often asked this question and what I am certain of is that no one knows the answer as of today, September 20th. The next four months will give the Vancouver real estate market time to feel itself out. Right now many buyers have stepped back and are in a wait and see mode. The market is most definitely slowing and correcting and whether it is a bubble about to burst is not yet know but in my opinion unlikely.
Vancouver Real Estate Market Predictions
The only way to look forward and to predict where the Vancouver real estate market is heading is by reviewing the most current data and current economic conditions. What I do know with absolute certainty is that in the 30 years I have been a real estate agent in Vancouver prices have never gone down. They have gone through cycles of downward corrections only to stabilize, correct and then continue the upward trend. All the successful Vancouver real estate investors I continue to work for have one philosophy in common. That philosophy is if you are buying and selling inside of a 5 years span you are vulnerable to negative market corrections. Investing in real estate should always be a long-term hold/outlook. Having a conversation with a professional real estate agent who has many years of experience can really help when wanting to buy or sell in a market that is going through a period of uncertainty.
Please feel free to call or email me for more info about the Vancouver real estate market.
Written by Don Urquhart Vancouver real estate agent since 1987