Metro Vancouver housing sales remain sluggish in May – CBC.ca

Metro Vancouver housing sales remain sluggish in May - CBC.ca
Vancouver home sales hit 19-year low as price decline continues
Housing sales in Greater Vancouver were 22.9 per cent lower last month than the 10-year average and the lowest for May since 2000, according to a report by Real Estate Board of Greater Vancouver (REBGV) published Tuesday.

The real estate board says a total of 2,638 homes were sold in May 2019, a 6.9 per cent drop from the 2,833 homes sold in May 2018.

Vancouver home sales rise 44.2% in May, but market still sluggish

The board's report says the supply of residential units in May 2019 was on the highest since September 2014.

Only attached homes showed a modest 0.6 per cent sales increase over 12 months and prices climbed marginally over the last months. But overall, the real estate board says the $779,400 benchmark price is down 7.6 per cent from May 2018.

Metro Vancouver home sales up modestly in May: Real Estate Board of Greater Vancouver

A total of 14,685 homes are currently listed for sale on the MLS database in Metro Vancouver, a 30 per cent jump from the 11,292 homes listed in May 2018.

Last month, 1,246 condos were sold, a 12.9 per cent decrease from the 1,431 condos sold in May last year, according to the report.

The composite benchmark price for all residential homes in Metro Vancouver is currently $1,006,400, an 8.9 per cent tumble in one year, a 3.4 per cent skid over the last six months and a 0.4 per cent slip since April.

The benchmark price of a Metro Vancouver condo is currently $664,200, a 7.3 per cent decrease from May last year.

The number of listed homes across Metro Vancouver also edged upward 2.3 per cent between April and May, to 14,685, marking the highest number of properties for sale in the region since September 2014.

The number of detached home sales in May was more positive in comparison, but was still down 1.4 percent from May 2018.

The benchmark price for a detached house in the region is currently $1,421,900, an 11.5 per cent drop from May last year.

Detached home sales dropped 1.4 per cent since May 2018, while the $1,421,900 benchmark price is 11.5 per cent lower since then and marks a 5.4 per cent decrease in six months.

REBGV president Ashley Smith says high home prices and mortgage qualification issues caused by the federal government's B20 stress test are significant factors in the decline in sales.

VANCOUVER — Home sales in Metro Vancouver showed some bounce in May, but the Greater Vancouver Real Estate Board says sales remain below historical averages.

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Generally, analysts expect prices to drop when the ratio falls below 12 per cent, while a sustained ratio above 20 per cent can push prices up.

Housing sales have slid to a 19-year low in Greater Vancouver as listings languish and prices fall to levels last seen in mid-2017.

The benchmark price for condominiums is $664,200, a 7.3 per cent decrease over the same period and a slip of two per cent in six months.

Sales volume in May fell 6.9 per cent compared with the same month in 2018, and slumped 22.9 per cent beneath the 10-year average for May, the Real Estate Board of Greater Vancouver said on Tuesday.

Its a 44.2 per cent rise over the 1,829 homes sold one month earlier, but a 6.9 per cent fall from the 2,833 homes sold in May 2018.

Last months 2,638 sales in the region for various housing types were the lowest for May since 2000, when only 2,059 properties changed hands in that month.

The board says 2,638 homes changed hands in May — the first time this year that sales jumped above 2,000 properties in a month.

The residential benchmark price, an industry representation of the typical home sold in Greater Vancouver, has declined month over month for the 12th consecutive time. It fell last month to $1,006,400, down from a record-high of nearly $1.1-million in May, 2018, and the lowest since June, 2017.

Sales in May remained nearly 23 per cent below the 10-year May sales average and the lowest for May since 2000.

For prospective purchasers today, the change to a buyers market is welcome in a region still struggling to cope with housing affordability.

“High home prices and mortgage qualification issues created by the federal government’s stress test remain significant factors behind the reduced demand the market is experiencing today,” board president Ashley Smith said.

Shane Miller-Tait, a 32-year-old electrical engineer, said he is hoping for prices to drop further to make it possible to present serious bids.

I could tell the market was unsustainable because of speculators and money launderers, and clearly going to come down sooner or later. I wasnt going to be the one left holding the bag, said Mr. Miller-Tait, who is currently renting a one-bedroom condo with his fiancée.

There was a modest increase in home sales in Metro Vancouver during the month of May, according to the latest figures from the Real Estate Board of Greater Vancouver.

For sellers of detached properties, the downturn has knocked hundreds of thousands of dollars off what they might have fetched for their homes in the first half of 2016, when detached prices set record highs in most neighbourhoods.

That is down 0.4 per cent from April and 3.4 per cent over the past six months. It is also an 8.9 per cent decrease from May 2018.

On Vancouvers west side, the benchmark price for detached houses sold has tumbled more than $500,000 over the past year to $2,927,600.

Bryan Velve, who became a real estate agent in 1987, said the phenomenon among buyers known as fear of missing out, or FOMO, now seems a distant memory. Today, sometimes a buyer will make an offer at one price and you finally persuade the seller to take that price. But nope, the buyer then decides the market is still going to fall more and wants a cheaper price, Mr. Velve said.

Greater Vancouvers condo segment began softening in mid-2018, including in the less-expensive suburbs. In Tsawwassen, for instance, the benchmark price for condos sold has fallen 8.5 per cent over the past year to $464,300.

Bryan Yu, deputy chief economist at Central 1 Credit Union, forecasts the regional benchmark price for detached homes, condos and townhouses could decrease another 5 per cent to 6 per cent by the end of 2019, before stabilizing in 2020. You will see more buyers coming back to the market. Prices will continue declining even as sales start to pick up,” said Mr. Yu, who noted that May sales rose 44.2 per cent compared with sluggish activity in April.

The federal banking regulator implemented a stress test on Jan. 1, 2018, making it tougher to qualify for mortgages.

High home prices and mortgage qualification issues caused by the federal governments B20 stress test remain significant factors behind the reduced demand that the market is experiencing today, board president Ashley Smith said in a statement on Tuesday.

The previous BC Liberal government introduced a 15-per-cent tax on foreign buyers in August, 2016. The BC NDP government raised the foreign-buyers tax to 20 per cent in February, 2018, while expanding that tax beyond the initial target of the Vancouver area.

International purchases of real estate in the Vancouver region have decreased to less than 3 per cent in March, 2019, from about 13 per cent of the total in the seven weeks before the taxs mid-2016 adoption.

Industry experts say other provincial factors include a crackdown on money laundering, taxes aimed at higher-end properties, as well as what the NDP government calls a speculation tax that is targeted primarily at out-of-province residents.

Sales activity for detached houses selling at more than $3-million on Vancouvers pricey west side has hit a deep freeze. For example, only 29 detached properties sold for more than $3-million on the citys west side in April, according to data service SnapStats. That is down 80 per cent from the 145 sales during the height of the housing market boom in March, 2016.

Sellers now have to reduce their price expectations to lure buyers. A listing for an 80-year-old bungalow went on the market on March 1 in the Point Grey neighbourhood on Vancouvers west side. The property at 4247 West 15th Ave. sold in mid-April for $2,135,000, or $245,000 below the asking price of $2,380,000. The assessed value for the property in July, 2017, was $2,860,700, most of which was land value since the house itself is viewed by developers as a tear-down.

In the nearby Dunbar neighbourhood, a two-storey house built in 2016 sold in April for $3,485,000. That property at 3439 West 22nd Ave. sold in August, 2017, for $3,860,000.

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