The Vancouver housing market has been experiencing a housing supply shortage and seller’s market conditions which are expected to continue through the fall. This echoes what’s been playing out across much of Canada, where seller’s market conditions are present in 26 of 29 regions analyzed in the RE/MAX Fall 2021 Housing Market Outlook Report.
Low mortgage rates coupled with Vancouver’s low housing inventory has created a shift in the market toward local buyers. Alongside this shift in buyers, properties are also selling quickly, spending on average less than one month on market. Days on market is an important measure, which tracks how long it would take to liquidate the current supply of listings at the current rate of sales. This pattern has resulted in a sustained seller’s market, which is expected to continue for the remainder of 2021.
Demand and sales were up across all property types in the Vancouver housing market. Condominiums saw the biggest year-over-year increase in sales between January 1 and August 31, with 1,884 transactions logged compared to 1,172 during the same period in 2020. Local broker Helen Wong of RE/MAX Crest Realty notes that townhomes have increased in popularity, however, with rising townhome costs and families’ desire for more space and privacy, the trend is likely to shift in favour of single-family detached homes for the remainder of the year. Single-detached home sales reached 1,291 units by August 31 year-to-date, compared to 900 during the same period in 2020.
Young couples looking to own, or renters looking to buy their first property and take advantage of low mortgage rates are driving demand in the region. First-time homebuyers – typically newlyweds, renters and new Canadians – are also purchasing more condominiums before using their equity to upgrade to larger homes. With low rental supply and vacancy rates, there is Vancouver is experiencing significant demand from renters who are looking to buy. This is expected to continue through the remainder of 2021, with no major increase in inventory expected due to building delays and increased holding costs.
Single-detached homes in the Vancouver housing market saw the largest average residential price increase year-over-year, up 16.39%, followed by townhomes at +13.9% and condos at +5.1%.
The Vancouver housing market is expected to see a further average price increase between +2% and +5% for the remainder of 2021.
From a broader perspective, most of Western Canada is experiencing price growth driven by low supply and high demand, resulting in challenging conditions for many homebuyers in large urban centres such as Vancouver. However, affordable options still exist for homebuyers who are considering alternative markets, thanks to their continued ability to work remotely. RE/MAX brokers have reported this trend in Edmonton and Calgary, where buyers are leveraging more purchasing power thanks to local housing affordability coupled with lower interest rates. RE/MAX brokers and agents anticipate this trend to continue through the remainder of 2021.
When comparing average sale prices year-over-year in Western Canada’s single-detached property segment, British Columbia saw the most notable growth, led by Nanaimo (+23%), Victoria (+19.1%), Kelowna (+20.5%) and Vancouver (+16.4%). Nanaimo and Kelowna also saw the largest price surges in their condo and townhome segments when compared to other Western Canada regions. Average condo prices were up 17.6% in Nanaimo and 17.3% in Kelowna, while townhome prices were up 65.8% in Nanaimo and 17.7% in Kelowna. In Calgary and Regina, the fall outlooks are relatively status quo, with prices expected to remain flat in Calgary and +1% in Regina. Meanwhile, Edmonton, Saskatoon, Vancouver, Victoria, Winnipeg and Nanaimo are expected to see price gains ranging between 4% and 9% through the remainder of the year, according to RE/MAX brokers and agents.
National Canadian Housing Market Trends
Conditions in the Toronto housing market are echoed across the rest of the country, with single-family homes seeing the most pronounced price increases year-over-year in 2021, rising between 6.8 and 27.3 per cent across 26 or 29 markets surveyed in the report. And much like Toronto real estate, activity in this property segment is being propelled by strong demand by young families, a trend that RE/MAX brokers and agents expect to continue through the fall.
The average residential price in Canada, across all housing types, is anticipated to increase by 5% in the remaining months of 2021.
“Housing activity throughout the pandemic has remained strong, so it comes as no surprise that the outlook for the remainder of the year continues on an upward trajectory, which is great for homeowners and their equity, but challenging for first-time buyers who have been priced out of the market,” says Elton Ash, Executive Vice President, RE/MAX Canada. “We must continue to educate Canadians from a practical, real world, point of view. What is affecting the Canadian housing market right now? Low Interest rates, economic stimulus, higher home-buying budgets, a higher savings rate, homeowners too scared to sell, and not enough new construction. These factors have created current market conditions.”
Adds Alexander, “The Canadian housing market has historically given homeowners great long-term returns and solid financial security, but there’s no doubt that the rapid price growth we’ve experienced recently is cause for concern. However, it’s not cause for panic. The data shows single-detached home price acceleration may be starting to level off in some urban centres, but prices continue to rise in many smaller cities and communities that were once havens for affordability. Real estate has been a boon to the Canadian economy, during the pandemic and before it. We believe in the long-term health of Canada’s housing market, but in order to protect it, we need to acknowledge and address the housing supply shortage. Our current government needs to stop applying band-aids and cure the problem at its root.”