Smaller homes lead price increases as buyers try to get ahead of mortgage changes
With Greater Vancouver home sales spiking in October, and townhomes and condos leading the way, it seems that buyers may be rushing to enter the housing market ahead of the new mortgage rule changes coming January 1.
There were 3,022 residential sales in October, a 35.3% rise over the slow post-foreign-buyer-tax market of October 2016, and an increase of 7.1% over September’s 2,821 homes sales, according to a Real Estate Board of Greater Vancouver (REBGV) market report November 2. For a visual overview of October's Greater Vancouver real estate market trends, see our detailed infographic.
October’s sales total was also 15% above the 10-year sales average for the month and virtually flat with the relatively hot August market of this year.
Jill Oudil, REBGV president, said, “The growth in our provincial economy and job market is contributing to today's demand. The federal government's announcement of plans to tighten mortgage requirements for the seventh time in the last eight years also helped spur activity in the short term. Many buyers are trying to enter the market before the changes are in place.”
Sellers in the current market also seem more driven compared with a year ago. There were 4,539 new residential listings for sale on Greater Vancouver’s Multiple Listing Service® in October – a 14% increase over October 2016, although this is a drop of 15.6% compared with September, when 5,375 sellers listed their homes on the fall market.
The total number of homes listed for sale on the local MLS® stood at 9,137 as of October 31, which is a 0.1% drop compared with October 2016, when home absorption was slow, and a 3.5% decrease from September 2017.
Greater Vancouver’s total sales-to-active listings ratio for October 2017 is 33.1% – considered a strong seller’s market. But broken down by property type, it is a balanced market, at 16.8%, for detached homes, compared with very strong seller’s markets for townhouses (44.8%) and condos (66%).
The benchmark price of a typical Greater Vancouver home (composite of all three key home types) continues to break records each month, currently standing at $1,042,300, which is $5,000, or 0.5%, higher than in September. Year over year, it is a 12.4% rise compared with October 2016.
Sales and Prices by Home Type
Single-family home sales saw the biggest annual and monthly increase, but had a lesser impact than condos on the overall sales growth as their transaction totals were smaller. There were 940 detached sales on Greater Vancouver’s MLS® in October, a 44.2% increase from the paltry 652 detached sales recorded in October 2016 and a 10.3% rise over September’s 852 sales.
The benchmark price for a typical Greater Vancouver single-family home is now $1,609,600. This is a 4% increase from October 2016, the lowest annual price rise of all three home types. This new benchmark also made detached houses the only home type to see a monthly decline in price, at 0.5% lower than September’s $1,617,300.
Sales of attached properties such as townhouses and rowhomes in October totalled 550 units, a 36.5% increase compared to the 403 sales in October 2016, and 6.2% more than the 518 townhome transactions the previous month.
A typical attached home now has a benchmark price of $802,400, which is 17.7% higher than October 2016 and a 2% increase over September 2017 – the steepest monthly rise of the home types.
Condo sales in Greater Vancouver continued to be the biggest market driver, even though they posted the lowest annual and monthly growth. Transactions totalled 1,532 units in October, a 30.1% rise over the 1,178 sales in October 2016 and 5.6% more than in September this year.
The benchmark price of a Greater Vancouver condo is $642,000. This is a 22.7% leap from October 2016 and a one per cent 1% increase compared with September 2017.
Oudil added, “Conditions continue to vary significantly based on property type. The detached home market is well supplied with homes for sale, which is relieving pressure on prices. It remains a much different story in the townhouse and apartment markets. Buyers of these properties continue to have limited supply to choose from and are seeing upward pressure on prices.”
Home prices vary widely throughout the REBGV region. To get a good idea of home prices in a specific location, check the detailed MLS® Home Price Index in the REBGV full statistics package.