Vancouver Real Estate Prices Are Expected to Fall in the Second Half of This Year
While Vancouver Real Estate prices are currently twice as high as they were last year, they are expected to fall in the second half of this year. While this is exciting, buyers should be careful to avoid bidding wars. As Vancouver’s housing supply is very varied among the different sub-regions, it is important to plan accordingly.
Pre-Sale and new construction home prices have accelerated more dramatically than sales of existing homes
In recent years, house prices in Vancouver and other major cities across Canada have increased rapidly. The housing market is fueled by strong demand and a shortage of supply. Foreign buyers have also contributed to escalating prices. In recent years, the Canadian government has introduced new housing regulations to curb speculative purchases and increase housing affordability. In British Columbia, for example, land transfer taxes have been introduced on foreign purchases of new homes.
Despite the rise in home prices, buyers are still struggling to make ends meet. Rising prices have surpassed income growth and inflation in many markets, which means that demand is lagging behind. But signs of a market slowdown are starting to emerge. Home sellers are listing their homes at lower rates than they did last year. As a result, home sales are expected to slow compared to last year. If this trend continues, the housing market could tip towards a more balanced market in the last quarter of the year.
Inventory is beginning to accumulate
While more people are looking to sell their homes in the region, homebuyer demand has remained subdued over the past month. According to the Real Estate Board of Greater Vancouver, there were 1,687 residential home sales in September, a decrease of 9.8 per cent compared to August, and 46.4 per cent lower than the 10-year average.
As a result, prices are beginning to fall for luxury homes in the area. During the month of January, the number of luxury home sales in the region fell by almost forty-five percent. This Sam Heller Vancouver West Real Estate is the lowest monthly sales for homes in this price range since 2013. Inventory in Vancouver has reached 41 months, the highest level since the height of the housing bubble three years ago. This puts the city’s luxury home market in the crosshairs of price sensitive buyers.
Market correction is overdue
Metro Vancouver house prices have been surging over the past few months, pushing more potential homebuyers out of the market. At the same time, condo values have declined, pointing to a potential correction in the housing market. This is significant because condos are traditionally the first step up the property ladder. When condo values drop, house prices will inevitably follow. However, people planning to sell their homes should take heart. Home prices are still at all-time highs.
The city’s housing market has been experiencing rapid changes over the past six months. The introduction of tougher federal mortgage qualification rules, as well as provincial taxes targeting foreign investment, have all put the brakes on buyer demand. As a result, the Vancouver and British Columbia real estate markets are undergoing a correction. While sales volumes have fallen by double digit percentages over the past two years, the number of homes on the market has increased sharply.