The first quarter of 2018 witnesses steady decline in home sales and listings
According to the Real Estate Board of Greater Vancouver (REBGV), residential home sales witnessed a 29.7% decrease from last year. In March 2017, sales were recorded at 3579 homes sold which has now showcased a decline to 2517 homes in March 2018. But, it is indeed a 14% increase when compared to the 2027 homes sold in February 2018.
March 2018 has witnessed a sale record which is 23% below the 10-year March sales average. The Multiple Listing Service®(MLS®) in Metro Vancouver witnessed a solid 6542 homes for sale on its network in the first quarter of 2018. This in turn is a 13.1% decrease from the 7.527 homes which were put up during the same time in 2017. Alarmingly, this is the region’s lowest total first-quarter sales since 2013.
REBGV president, Phil Moore believed that the less demand from the buyers and even lesser homes listed for sale has led to this statistic. “High prices, new tax announcements, rising interest rates, and stricter mortgage requirements are among the factors affecting home buyer and seller activity today.”
Moving on to detached, attached and apartment properties, 4450 homes were listed for sale in the region in March 2018. This is a 6.6% decrease from last year which recorded 4762 homes for sale. But, this in fact is a 5.4% increase when compared to February 2018 in which 4223 homes were up for sale. In total, 12469 homes were listed for sale in the Metro Vancouver region in the first quarter of 2018 which is a 0.8% decrease from the same period in 2017 wherein 12568 homes were up for sale. Again, it’s the region’s lowest ever since 2013.
According to the MLS® system, the total number of homes listed for sale is equal to 8,380. This represents a 10.5% increase from March 2017, wherein 7,586 homes were up for sale. This is also a 7.1% increase when compared to February 2018.
Moore further commented saying, “Even with lower demand, upward pressure on prices will continue as long as the supply of homes for sale remains low. Last month was the quietest March for new home listings since 2009 and the total inventory, particularly in the condo and town-home segments, of homes for sale remains well below historical norms.”
An important indicator in the real estate biz, sales-to-active ratio for March 2018 for all property types was recorded at 30%. Breaking it down further by property type:
- Detached homes – 14.2%
- Town-homes – 39.9%
- Condominiums – 61.6%
The general belief is that downward pressure on home prices occurs when the ratio falls below 12% for a consistent period of time, while as an upward pressure is experienced when the ratio shoots above 20% for a sustained period.
The MLS® Home Price Index composite benchmark price for all the residential properties is quoted at $1,084,000 in Metro Vancouver. This showcases a 16.1% increase over the last year and a 1.1% increase over February 2018.
While as in March 2018, sale of detached properties witnessed a decrease of 37% from 1150 in 2017 to 722. The benchmark price for the same was recorded at $1,608,500 which is a 7.4% increase from 2017 and a 0.4% increase from the previous month.
Similarly, the sale of apartment properties witnessed a 26.7% (1349) decrease when compared to last year which sold 1841 homes. Also, the benchmark price for the same was recorded at $693,500. This in turn is a 26.2% increase from the previous year and 1.6% increase when compared to February 2018.
Lastly, the sale for property sales in March 2018 equalled 446 which is a 24.1% decrease when compared to the 588 homes sold in 2017. The benchmark price for an attached unit was recorded at $835,300. This again is a 17.7% and 2% increase when compared to last year as well as February 2018 respectively.
The market may improve in the second quarter but that is owing to some reform changes and potential investments in the sector. We can only wait and watch.