Condo Prices Hit All-Time High!

There’s more supply, yet we’re still inching deeper into the seller’s market territory. What is going on in the Vancouver real estate market?

The number of Metro Vancouver homes listed for sale on the MLS® rose nearly 23 percent year-over-year, providing more opportunity for buyers looking for a home this spring.

This is the most inventory we’ve had in the past 2 years.

Despite the welcome increase in inventory, the overall market balance continues inching deeper into sellers’ market territory, which suggests demand remains strong for well-priced and well-located properties.

The Greater Vancouver REALTORS® (GVR) reports that residential sales in the region saw a 4.7 percent decrease from the sales recorded in March 2023. This was 31.2 percent below the 10-year seasonal average.

While the market has cooled slightly compared to last year, we continue to observe modest month-over-month price gains of 1-2% at the aggregate level—an intriguing trend considering the sustained high borrowing costs

With the latest inflation numbers trending in the right direction, it remains likely that we’ll see at least one or two modest cuts to the Bank of Canada’s policy rate in 2024, but even if these cuts come, they may not provide the boost to affordability many had been hoping for.

So, we are 2 years into this rate hiking cycle and Vancouver has yet to see a significant downtown in pricing and affordability for homes.

In fact, condo prices in Vancouver are at an all-time high, further highlighting the resiliency of the Vancouver market. Condo prices are even higher than the all-time high record set in May 2022. We all know what mortgage rates were at that time compared to now.

So why is this happening? One theory is that many buyers are being priced out of the townhouse market due to the higher borrowing costs and now have to buy what they can which may be a condo. This is causing a larger pool of buyers to compete for that type of home. More demand equals higher prices.

The same thing is happening in North Vancouver in the detached home market. There has been so little inventory for so long now and demand just keeps on increasing. This is why when a 50 or 60-year-old detached home comes to the market, requiring a significant amount of work, it is still getting massive interest, multiple offers, and selling over the asking price.

So what does this mean for buyers and sellers?

Buyers have to be prepared. You have to have your financing in place. You need to work with a great agent who knows the market because things are moving fast. When you see something you like, in the neighbourhood you want to live in, and it checks most of your boxes, go for it.

Sellers need to understand that despite multiple offers situations and price increases in today’s market, you still have to price sharply if you want to generate interest for your home. Many homes are sitting on the market for months simply because their price isn’t in line with the market and buyers are drawn to where they perceive value, even if they wind up in a multiple-offer situation. Inventory is climbing and if your home is out of line with the current market value, it will sit.

However, if your home shows well and is priced well, it will sell quickly. So work with a great agent who understands the market dynamics in your neighbourhood and has an incredible marketing system.

There are several things coming which could impact the real estate market here in Vancouver. The recently announced renter’s bill of rights is getting a lot of attention. Transparency in rental history so renters can negotiate, and reporting rental payments to credit bureaus are two of the proposals. Neither of these makes any sense.  Given the current vacancy rates, how are renters supposed to negotiate their rent when the competition for homes is so fierce? And, reporting monthly rental payments to credit bureaus could harm some renters who are typically late on their rent payments. Renters are already well protected here in BC with the BC Tenancy Act.

The 2nd thing on the horizon is the much-anticipated rate cut, purportedly coming in June. Considering the current market's low inventory and strong demand, a June interest rate cut would significantly impact our market.

If you're looking to stay informed in the real estate market, whether buying or selling, knowledge is essential. Our Snap Stats market reports are an excellent resource, offering a wealth of information tailored to your specific area.

To access the full reports for Metro Vancouver, Greater Vancouver, or the Fraser Valley, simply click the images below.