The Urban Development Institute’s quarterly State of the Market report offers comprehensive and independent market intelligence on the Metro Vancouver real estate market, with data on new home and resale markets, immigration, global and local economic factors and affordability.
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Below is the economic summary by the report’s authors, Michael Ferreira and Jon Bennest of Urban Analytics Inc.
Click here for full Q2 State of the Market report.
Local Economic Factors
Key economic factors in Metro Vancouver continued to move in a positive direction in Q2 2014. The most recent Statistics Canada update shows Metro Vancouver’s unemployment rate dropping from 5.9% to 5.6%. This is down considerably from the 7.0% recorded in Q2 2013 and the 7.2 recorded in Q2 2012. Sales in the new home sector were also very positive in Q2 2014. Similar to last quarter, strong sales activity was reported across all housing sectors and locations throughout Metro Vancouver.
One of the more significant local events is the ongoing negotiations of the Provincial Government and the BCTF. The BCTF has an estimated 41,000 members and many of them reside in Metro Vancouver. The outcome (or lack of outcome) will have an impact on the ability of these individuals to purchase real estate.
Global Economic Factors
Global financial markets were definitely a positive highlight of Q2 2014. As of July 2014, the TSX index (Canada’s largest stock exchange) passed the 15,200 mark and is now at all-time highs. The Dow Jones Industrial Average also established new all-time highs after passing the 16,800 mark in July 2014.
While there was no shortage of global news events in Q2 2014, many of them were geopolitical rather than economic. The most prominent global events include continued conflict in eastern Ukraine and a destabilized Middle East. These events and issues may not necessarily have a direct economic impact on Metro Vancouver’s housing market; however they certainly draw attention to the relative desirability of our region and perhaps are examples of why such positive immigration levels continue to persist here. Also note that Vancouver was recently ranked by The Economist as the third most livable city in the world behind Melbourne and Vienna.
For the full report, click here. Here are some selected highlights:
- Outer Metro Vancouver accounted for two thirds of the townhome starts in Metro Vancouver. Vancouver proper accounted for only 5% of townhome starts.
- 73% of the apartment starts in Metro Vancouver this quarter occurred in Inner Metro Vancouver.
- BC’s and Metro Vancouver’s new home price index continued its downward trend into Q2 2014. Most of the downward pressure on new home prices in Metro Vancouver can be attributed to suburban locations further away from Vancouver's downtown core.
- Since 2010, the number of actively selling new concrete condominium projects has tripled in Outer Metro Vancouver but only increased slightly in Vancouver proper.
- Overall inventory levels of new wood frame condominiums (2,822) continue their downward trend and are now down 13% compared to the same period last year.
- In Q2 2014 in Greater Vancouver, apartment resales were up 16%, townhome resales were up 13% and single family resales were up 24% compared to Q2-2013.
- In Q2 2014 in the Fraser Valley, apartment sales were up 26%, townhome sales were up 26% and single family sales were up 20% year over year.
