The coronavirus pandemic has swept through the country, from the east coast to west coast. As a result, the real estate market has seen significant lows but has also showed encouraging signs of recovery following improving market conditions.
Overall, the Canadian housing market outlook is experiencing promising activity due to pent-up demand and low inventory in the market. These trends are evident in the Vancouver real estate market as well. The city, which was experiencing a tremendous amount of activity at the years start, is now ramping up once again.
Here’s a look at the road to recovery for the Vancouver real estate market:
The Vancouver Real Estate Market: Early in the Pandemic
The state of the Vancouver real estate market early in the pandemic, like other markets in the county, was troubling. During the months of March and April, Vancouver was experiencing plummeting home sales. This trend continued into May, where home sales were 54.4 per cent lower than the 10-year sales average for that month.
It was evident that as a result of the coronavirus pandemic, individuals had put their homebuying plans on hold. The typically busy spring homebuying season was nowhere in sight. For those willing to (or obligated to) participate in the market, realtors were able to guide them safely through the process, embracing tools such as virtual tours and e-signatures.
Yet, by late Spring and early Summer, activity had bounced back in this city. Buyers were eager to get back into the market after being cooped up in their homes.
In June, Vancouver experienced year over year highs for home sales. The Real Estate Board of Greater Vancouver (REBGV) noted that listing activity outpaced historical averages.
This positive market activity continued and by August 2020 there were 5,813 new listed detached, attached and apartment properties for sale in Metro Vancouver. This represents a 55.1 per cent increase compared to the 3,747 homes listed in August 2019. Meanwhile, in August home sales across Vancouver showed a 36.6 per cent increase from 2019.
Vancouver Condo Market
During the early months of the pandemic Vancouver condo prices expectedly dipped. Yet, by June condo listings began to climb which pointed to renewed confidence from sellers. There was also matched demand from homebuyers who were eager to re-renter the market to purchase a condo in the Vancouver market.
Condo sales were experiencing year over year highs during these summer months. Throughout July and August, condo prices were also on an upward trend with year over year highs. In August, the benchmark price of an apartment property was a whopping $685,800.
Vancouver Condo Market
Single-family homes in Vancouver were experiencing greater jumps than condos or townhomes. Due to the coronavirus, real estate trends are notably shifting; after being confined to their homes for months, the preference for more spacious homes or lots is growing.
In August, the median price of a detached home was $1,491,300. Meanwhile, the benchmark price of an attached home is $806,400. Both are year-over-year highs, demonstrating that there continues to be demand in this segment of the real estate market despite uncertainties.
There are a variety of factors that have helped boost recovery of the Vancouver real estate market.
Firstly, the Bank of Canada dropped the benchmark interest rate to 0.25% in order to stimulate the economy. This is the lowest the rate has ever been and may have ignited the desire for Canadians to purchase homes despite challenges caused by the coronavirus outbreak.
This lowered interest rate can allow people to secure larger mortgages at a lower cost, ultimately allowing them to widen their home search and access more of the amenities they may prefer in a Vancouver home.
Another factor contributing to the market upswing is the increased confidence in public health measures, causing more people to venture outside of their homes. As the province entered stage three this summer, Vancouver businesses that had previously laid off employees or reduced salaries due to a slowdown in business, started hiring again and increasing salaries to meet demand. This economic resurgence has renewed people’s financial power, giving them the confidence to enter the real estate market and make a home purchase.
Lastly, limited supply in the Vancouver market is also contributing to increased competition in the market. With pent-up demand, many are eager to secure a home, igniting bidding wars across the city.
Yet, uncertainties related to the coronavirus means the real estate market could change once again in the fall. With flu season returning, fears of a second wave of the virus could be heightened, leading to a decrease in activity. This makes it challenging to predict what will happen to the market in the fall season.
The Vancouver real estate market is a popular market to purchase a home in. Even though the coronavirus affected this urban market early on, with increased confidence and improving market conditions, Vancouver is well on the road to recovery.