By ThinkPol Staff

There may be hope on the horizon for prospective condo buyers in Metro Vancouver trying to get a foothold in the region’s runaway housing market, a Vancouver realtor says.

Even as the single family home market enters buyer’s territory, the benchmark price of an apartment property jumped 27% year-over-year in February 2017, to reach $682,800^[1]https://www.rebgv.org/sites/default/files/REBGV-Stats-Pkg-February-2018.pdf, which is 8.5 times the region’s median family income^[2]http://www.statcan.gc.ca/tables-tableaux/sum-som/l01/cst01/famil107a-eng.htm.

“Inventory is at historical lows and at its lowest level since December 2016 and demand remains brisk as buyers focus on more accessible townhomes and condos,” Stephen Wahl^[3]http://www.stephenwahl.ca/, a Vancouver-based realtor with Oakwyn Realty told ThinkPol. “Though more supply is coming online over the next year or two, the current pace can’t keep up with demand. Pre-sales are selling out fast and condos under $800K remain highly coveted in the downtown core.”

February 2018 did show small decline in the number of apartment property sales, declining 7% to 1,185 from 1,275 in February 2017.

“Sellers seem reluctant to adjust pricing even at the risk of listings going stale and buyers seem more reticent and unwilling to snap up anything that’s listed at least downtown,” Wahl added. “We’ve seen listings remain active for a month or two or even longer.”

The biggest price jumps in the multi-family market are being witnessed far away from downtown Vancouver, with outer suburbs of Maple Ridge recording a 47% year-over-year jump, and Pitt Meadows registering a 45% increase.

“More price conscious buyers search further out in the suburbs for more affordable options, putting unprecedented upward price pressure in the outer suburbs,” Wahl explains. “Places like Maple Ridge town centre are virtually on fire and as far away as Langley, Abottsford and north to Squamish continue to see price increases in the condo and townhome market.”

Wahl believes that inertia is driving the market upwards.

“I think we’re still seeing a bit of latent demand fueled by mortgage pre-approvals that came under the wire before the stress test changes came into effect Jan. 1 which remain effective for up to 90 days,” Wahl said. “In the downtown peninsula, the continued development (and easy sellout) of luxury presales continues to put upward pressure on the price per square footage benchmark: not long ago what averaged around $1000 a square foot can now easily surpass $2000.”

The realtor feels that prospects for those trying to break into the market may be about to improve.

“The one hope is that because housing starts are up and more supply is expected to come online in the next year or two, this could help temper prices in this segment of the market,” Wahl said. “If interest rates continue to rise we could see a little softening in prices in the under $700K segment of the condo market; or at least we can hope the recent unabated price escalations won’t continue for too much longer, allowing more first time buyers to enter the market.”

[Photo Credit: Kenny Louie]