All across the globe, industries and economies are still trying to recover from the devastating effects of the Coronavirus pandemic. Governments’ lockdown measures to curtail the spread of the novel virus have severely impacted all sectors of the economy. While some industries are already fast recovering from the setbacks, it’s not very easy for some as they’re still trying to stabilize and slowly make their way back up.
One of the industries that have been affected by COVID-19 pandemic is the real estate market. For many people in Vancouver, BC, the big question on their minds is, “How is the Vancouver real estate market today?”
Some people who intend to list their homes for sale are having second thoughts because they don’t know how well and fast it’ll sell.
This article provides all the necessary information about the state of the real estate market in Vancouver, BC, and help you make an informed decision if you’re looking to invest in the real estate market.
The Real Estate Market In Vancouver, BC Is Stable And Booming
The COVID-19 pandemic has affected various sectors of the economy in Vancouver, BC, in many ways. Still, the real estate market has remained stable despite the recession triggered by the pandemic. Even though the unemployment rate in Vancouver, BC is currently at 13 percent, with a 7.8 percent forecast GDP reduction in 2020. Nonetheless, the prices of homes in Vancouver has remained stable.
As of July 2020, Vancouver home sales prices rose about 28% as home buyers took advantage of the decrease in interest rate. The average cost for most of the residential properties in Metro Vancouver has gone up by 2.9 percent compared with May 2019. In July 2020, the buyers purchased 3,128 homes in the Vancouver Metro area, which is higher than the 2,443 houses sold in June.
Central 1 deputy chief economist Bryan Yu said that home prices in Vancouver BC have stayed stable because lesser properties are available for sale. According to him, the people who are most affected by the economic recession triggered by the pandemic aren’t key players in the Vancouver real estate market.
Even though there’s evidence that the prices of rentals have declined from February to April, Bryan Yu said that the ownership market has remained unchanged and that the prices can still go higher. This statement has proven true to an extent, because, by August 2020, the Vancouver real estate market experienced a boom as home prices rose, hitting a benchmark of $1,031,400.8.
Although there was an initial decline in March and April, July marked the third month in which the Canadian real estate market has recorded a new record high as home sales increased to 15% and 30 percent year on year increases.
Residents in Vancouver are still seeing the benefits of investing in real estate because properties listed for sale only stay for an average of 17 to 20 days in the market, and this number is quite encouraging considering the number of job losses and other economic changes triggered by the COVID-19 pandemic.
However, there are many factors to consider if you’re in Vancouver, and you’re looking to sell or buy a property in this COVID-19 period. It’s always better to seek the help of a real estate agent local to Vancouver to get you fully equipped with the necessary information you need for the buying or selling process. The agent will also thoroughly explain details of the possible outcome so that you don’t make the wrong choice.
In general, the Vancouver real estate market is recording an increase in demand for homes. It has also recorded historical lows in housing inventory due to the rise in the need for homes. It’s presumed that this growth in demand is a result of the current record-low mortgage rates. The mortgage stress test has also been made more flexible than ever before, making it easier for buyers to buy more expensive homes.
The Real Estate Market In Vancouver BC Is Experiencing A Change In Demand
The COVID-19 pandemic has changed the way people buy and sell houses in Vancouver. Although the prices of homes in Vancouver have remained stable, the priorities in the facilities that people are searching for are currently changing due to the personal safety measures that have been introduced to curtail the spread of the Coronavirus. This means that people looking to buy a house are now more concerned about how wide the rooms are. They have a newfound interested in houses that have enough space to practice the physical distancing guidelines at home.
Also, there’s a noticeable increase in the demand for houses that allow guests to use the toilet without necessarily intruding into the master’s bedroom than the demand for homes without a powder room.
Another factor that has greatly affected the type of residential houses and condominiums currently in demand is that most people now have to work from home due to the COVID 19 social distancing guidelines. As a result, buyers are looking for apartments with creative designs that they can easily convert into an office to allow them to work from home.
Safety is now the number one priority in the minds of people who are looking to buy a home. As such, there has been a sharp decline in open houses because both buyers and sellers aren’t so eager to come in close contact with each other because of the physical distancing guidelines.
Open houses are essential in real estate business because it helps generate interest in a property, without open houses, there’ll be a significant decline in the number and prices of houses sold. This is why some real estate agents have come up with different ideas on how to hold open houses without necessarily jeopardizing the health of both the buyers and sellers.
Sheila O’Brien, the O’Brien Group’s co-founder, said that she and her team have been conducting virtual open houses and doing live streams on Facebook. They record Livestream tours of the property and real estate agents, and even members of the public can join the live stream and ask questions about the property in question.
To reduce public health risks attached to the traditional open houses, home buyers and many real estate agents have shifted to virtual and online means of holding open houses. Agents have also resulted in booking appointments for only those who’ve shown a high level of interest in the property to view the property in person.
Increase In Prices Of Residential Properties
The prices of all residential properties in Vancouver have gone up by a 4.4% year over year increase in the first quarter of 2020. A recent index from Realtor.com indicates that home prices and the demand for houses have increased above the January pre-COVID-19 period. Meanwhile, the market recovery index also suggests that the real estate market is on the path of recovery from the setbacks initiated by the COVID 19 pandemic. The demand for houses is currently above baseline levels according to the recent reports from the Mortgage Bankers Association.
Javier Vivas of Realtor.com said homebuyers’ interests recovered quickly from COVID 19 setbacks and has remained high despite the weaker economic environment. Factors such as low mortgage rates, virtual tools, and the lift of lockdown have enabled home buyers to continue the home search process, although often with adaptations. According to him, housing has remained an essential good, and this activity has shown that the real estate market can remain fairly active even during recession periods.
Daniel Hale, an economist at Realtor.com, has also said that home prices could go even higher if there’s no significant increase in supply. Contrary to the popular notion that the COVID-19 period isn’t the best time to sell a home because of the economic uncertainties and social unrest triggered by the pandemic, home prices are back to their pre COVID pace, and home listings are currently spending lesser time in the market.
Vancouver Rental Trends In August 2020
During the first few months of the Coronavirus pandemic, when governments put lockdown measures in place to reduce the spread of the virus, the short-term rental markets in Vancouver, BC, suffered a decline because fewer tourists were coming in as a result of the travel restrictions. Since Vancouver is a famous tourist city, the reduction in the number of tourists coming into the city caused a slow down in the short-term rental market.
Sales of condominiums were also relatively low because people who often buy condominiums are immigrants, newly wedded couples, and individual investors who buy to rent the units out to students. Since schools were closed due to the pandemic, there was a significant decrease in the demands for condominiums.
In the past few months, however, the benchmark prices for homes have accelerated as the lockdown restrictions have been lifted. Condo listings have risen significantly in August. The average rent for furnished one-bedroom apartments in Greater Vancouver has increased by 27.4% as of August 2020.
Although the furnished rental market, which is typically short-term rentals, experienced a decrease in demand in the previous months, the demand has gone up this month. This increase could be because people are now looking to buy these rentals for safety reasons or to quarantine. It could also be because the immigration restrictions are being lifted, and tourists are coming into Vancouver once more.
Vancouver Housing Prices as of August 2020
Prices Now One Year Ago
- 2 Beds. $1.8M+4% $1.3M
- 3 Beds. $2.1M-6%. $2.2M
- 4Beds. $2.1M-3%. $2.2M
- 5Beds. $2.6M+19% $2 1M
- 6Beds. $2.8M+13% $2.5M
House Listing Stata as At August 2020
No. Of Beds New Listings Active Listings
2 Beds 12 30
3 Beds 52 94
4 Beds 97 232
5 Beds 102 277
6Beds 87 227
Home Prices According To Cities
City Average Price
- Anymore: $2.4M
- Bowen Island: $1.7M
- Burnaby: $943K
- Coquitlam: $831K
- Delta: $991K
- Langley: $771K
- Lions Bay: $2.4M
- Maple Ridge: $745K
- New Westminster: $768K
- North Vancouver: $1.2M
- Pit Meadows: $729K
- Port Moody: $855K
- Port Coquitlam: $706k
- Richmond: $972K
- Surrey: $875K
- Tsawwassen: $777K
- Vancouver: $1.4M
- West Vancouver: $4.3M
- White Rock: $808K
The above data reveals that the Canadian real estate market is currently one of the best real estate markets in the U.S. and the world at large. It has appealed to both domestic and international buyers because of low-interest rates. According to the Real Estate Board of Greater Vancouver, there has been a 28% increase in the sales of residential homes in July 2020 with a total of 3,128 homes sold, which is 28% higher than home sales in June and 22.3% higher than the home sales recorded in July 2019.
The board indicated an increase in competition and upward pressure on Vancouver’s home prices due to the low-interest rates and limited overall supply. In a news release, Colette Gerber, the Chair of the Real Estate Board of Greater Vancouver (REBGV), said that the increase results from pent-up activities from both the home buyers and sellers accumulating through the year.
Are There Risk Factors To Look Out For?
Even though the real estate market in Vancouver, BC, is currently booming, there are possible risk factors that can negatively affect the market. Some of these include:
- The ongoing efforts by the government to contain the spread of the COVID 19 pandemic in Vancouver, BC.
- How efficiently the U.S. government is handling the pandemic because exports south of the border contribute to the Canadian economy.
- How the real estate market will be affected once the mortgage payment deferral program expires.
Conclusion
The real estate market in Vancouver, BC, experienced a decline in the first quarter of the year due to the COVID-19 pandemic. However, there has been a sharp increase in demand from May through July. Home sales across Vancouver have reached levels that are far above what’s usually recorded in July as the residential home sales in July totaled 3,128, which is a 22.3% increase from residential home sales in July 2019.
Now might be the best time to buy a property in Vancouver because of the decrease in the interest rates and the mortgage payment deferral program currently in place. However, there are several risk factors to consider before buying a home in this COVID 19 period. You should seek the help of expert realtors before making any decisions.