The spring 2024 trend continued into May, characterized by growing inventory across various markets and housing types. Although the entry-level townhome segment shifted to a seller’s market, the one and two-bedroom condo markets, as well as the entry-level single-family home market, remain balanced.
Townhome sales surged by 27 percent, with one and two-bedroom condo sales also increasing by 18 and 3 percent, respectively. Conversely, sales of entry-level single-family homes dropped nearly 20 percent due to enduring high interest rates, posing challenges for prospective buyers.
The South of Fraser markets, including Surrey, South Surrey, and Willoughby, Langley, account for more than half of the available newer entry-level single-family inventory. South Surrey and Willoughby, Langley were the only two markets to see an increase in sales compared to the previous month. This trend reflects buyers' continued search for more affordable opportunities.
The Bank of Canada's decision to lower rates by 0.25 during its June meeting could indicate a hopeful trajectory for the future. While the immediate impact on carrying costs may not be significant, the move fosters a psychological shift in the real estate market, potentially influencing buyer and seller behaviours.
A flurry of changes to local tenancy policies, short-term rental regulations and federal capital gains adjustments are all contributing to the current slowdown in the real estate market. However, this situation presents advantages for buyers seeking better opportunities to negotiate.
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For those interested in the new home market, the presale sector remains highly attractive for buyers in certain markets. Developers are offering compelling incentives, and the price gap between newer resale and presale units is currently narrower than it has been in years.
Manraj Dosanjh
Dexter Realty
Entry-level townhomes see sales turnaround in May.
In May, sales of entry-level townhomes experienced a 27 percent increase compared to April, marking a significant turnaround from the 44 percent decline seen the previous month. Total sales were only two percent lower compared to the same period last year.
Apart from the City of Vancouver, all other tracked markets are at or nearing seller’s markets, which could lead to higher prices should supply and demand imbalances persist.
Vancouver’s Westside experienced a notable rebound, with sales rising from none in April to four in May. Despite the low sales volume, this area is particularly interesting to monitor as it represents the region's priciest market for newer entry-level townhome purchases. In May, the median sale price was $1,739,000, nearly $300,000 higher than the second most expensive area.
Richmond and East Vancouver were the only markets to see sales decrease over the month.
The Fraser Valley markets remain attractive, as they are the only ones offering properties for under $950,000—nearly $250,000 less than Coquitlam, the most affordable market north of the Fraser.
Sales are increasing for one-bedroom condos.
In May, the one-bedroom condo market saw a robust recovery, with sales increasing by 18 percent from the previous month. However, sales were still 43 percent lower compared to the same period last year.
Burnaby, North Vancouver and Surrey City Centre saw the strongest gains over the month, with sales rising by 113, 57, and 21 percent respectively. These markets also represent three of the four markets with the most significant growth in listings.
Overall, the one-bedroom condo market remains balanced. South Surrey, Coquitlam, and North Vancouver are the only areas on the tracked list that are considered seller’s markets.
Notably, Coquitlam has seen a steady flow of new presale projects recently, with more launches expected in the second half of 2024. The combination of limited resale inventory and strong seller's market fundamentals makes Coquitlam an excellent area to explore presale opportunities.
Sales of two-bedroom condos remain stable, amid increase in inventory.
Sales of newer two-bedroom condos remained stable, increasing by two percent, while inventory rose by seven percent. The surge in sales was driven by markets south of the Fraser, with Willoughby, Langley, Surrey City Centre and South Surrey seeing increases of 36, 71, and 100 percent, respectively.
These areas are likely to maintain steady demand, driven by a nearly $150,000 difference in the price of two-bedroom condos when comparing markets south of the Fraser to the most affordable market north of the Fraser, Coquitlam. The median list price for a newer two-bedroom condo is $850,000, while in south of the Fraser markets, prices hover just under $700,000.
Interesting to note, with 276 total listings, Burnaby has more active two-bedroom listings than Surrey City Centre, Willoughby, Langley and Coquitlam combined.
Given that the City of Surrey, Township of Langley, Coquitlam, and Burnaby are responsible for most new home construction in the region, choosing to invest in Burnaby is currently a matter of uncertainty. With a sales-to-active listings ratio of only 13 percent, investors should pay attention to the suppressed demand and increasing inventory in the area. Similarly, while Surrey City Centre faces similar challenges, it remains the most affordable market for purchasing a two-bedroom condo.
Sales of newer entry-level single-family homes drop.
In May, sales in the newer entry-level single-family market dropped by 20 percent compared to the prior month, with a total of 43 sales recorded. Nearly 60 percent of these sales occurred in the south of the Fraser markets. The City of Vancouver contributed nine sales, while the remaining markets north of the Fraser reported the same number.
South Surrey and Willoughby, Langley remain the strongest selling areas for newer entry-level single-family homes. These neighborhoods are appealing due to their family-friendly amenities and relative affordability, making them attractive options for young families seeking to establish roots.
The standard entry point for newer entry-level single-family homes in the region has essentially become $1,800,000, based on the median price of current inventory.
Reasons why you should consider newer-home resale data:
- Facilitates wise choices in new pre-sale purchases by providing valuable comparables, offering insights into product considerations for both personal use and investment.
- Great for those looking to purchase housing that is still in the early stages of its lifecycle – this means less repairs & maintenance during the first few years of ownership.
- More recent building and developer history – provides assurance and certainty when making one of the most important transactions of your life.
- Homes include some of the latest design and technology – great for resale value.
- Monthly sales statistics crucial for evaluating and planning new housing developments.
- These figures are routinely used by industry stakeholders such as real estate developers to understand the value of land, and anticipated market values for newly completed homes.
And the listings keep on coming.
For the second month in a row, the story is listings. More and more listings came on the market in May, albeit off the pace of April. The result is active listing inventory at levels not seen since late 2020 after the world opened post Covid shutdown.
