Vancouver Real Estate Review for January 2017
A brief summary of 2016 
2016 started off with a hot real estate market; detached houses fueled record breaking statistics. It looked like there was no end in sight and it was the topic of conversation everywhere. The media was actively reporting that the market was pushing out local residents and neighbourhood communities were disappearing. Foreign buyers were continuing to snap up a significant percentage of Vancouver West Side and West Vancouver detached houses with sale prices much higher than asking prices. There was much speculation and a resounding call for intervention; the unsustainable pace of the Vancouver real estate market was in need of a correction. In March, the government initiated its first intervention to slow the incredibly fast paced Vancouver real estate market. The word “bubble” was now regularly heard throughout the media and local coffee shops. With all the negative connotations the single family detached market started to slow by mid-June followed by July’s announcement of the Foreign Buyers Tax. In August the single family detached market had slowed considerably and prices started to correct downwards. The percentage of detached houses selling to foreign buyers dropped from a monthly high of 20% to 0.3%. The luxury high end Vancouver West Side and West Vancouver houses came to a standstill. The downward price correction was now in play and the months of August through to December saw very few sale prices over asking, number of days on the market increased and overpriced listings sat on the market.
The condominium market was somewhat immune to all the storms of the detached market. In fact, the condo market activity started to increase in September from an already strong seller’s market with the exception of luxury 3 million dollar plus listings. The year of 2016 for the condominium market was extremely active due to low interest rates, close to zero percent vacancy rate and a lack of supply. The sub $500,000 price range had a 60 to 70 percentage absorption rate which translates to a very strong seller’s market. The Vancouver East Side condominium market was and continues to be a strong seller’s market up to $1.2 million and the Vancouver West Side condominium market was and continues to be a strong seller’s market up to $1.5 million for 2016.
Where is the Vancouver Real Estate Market Headed in 2017?
Detached Houses
The detached housing market in Vancouver East Side and North Vancouver remains active up to $1.6 million dollars. Vancouver West Side is active up to $3 million dollars but drops above the $4 million dollar price point. West Vancouver is currently a buyer’s market with an absorption rate of just 13 percent which translates to a buyer’s market. The West Vancouver luxury house market is very slow with 93 listings in the month of December priced above $5 million and only 4 sales.
The first quarter of 2017 will see good activity in the detached housing sector in the following price ranges.
Vancouver East Side
Vancouver West Side
North Vancouver
$800,000 to $1,675,000
$1,000,000 to $2,750,000
$1,000,000 to $1,700,000
Pricing will be an important factor as buyers can shop around and are sensitive to downward pressure on pricing.
Condominiums and Townhouses
There is currently a lack of supply and strong demand for condominiums and townhouses in Vancouver East, West and the Northshore. The majority of sales are in the $300,000 to $1,250,000 price range. Once we move into the 1.5 million and above price category the activity slows considerably. As long as interest rates remain at record lows and we do not see a significant increase in the number of listings we should see the $300,000 to $1.25 million price range continue to be busy. There are potential factors that could come into play to slow the pace of the condominium & townhouse market but this will be a ‘wait and see’ at this point.
The first quarter of 2017 will see good activity in the condominium and townhouse market in the following price ranges.
$300,000 to $1,300,000
$300,000 to $1,250,000
$300,000 to $1,500,000*
$300,000 to $1,000,000
*(half duplexes increase the upper price range)
Potential factors that could put downward pressure on the condominium and detached housing market in 2017
- The US has initiated their interest rate hikes. We may see Canadian banks make mortgage rates more expensive in 2017.
- The Foreign Buyers Tax will continue to slow sales in the high end luxury market.
- The potential of another government intervention to slow an overly active market.
- A substantial increase in the number of listings offered for sale particularly in the condominium and townhouse sector.
Written by Don Urquhart – Vancouver real estate since 1987 – Mount Pleasant and Olympic Village False Creek specialist