Metro Vancouver’s housing market is a popular topic of discussion, no matter where you are in the country. Prospective home buyers and sellers watch the market closely, as ongoing trends can have a significant impact on sale prices. This summer’s housing market has shown itself to be a new game, with a surprising disparity between the number of listings and the corresponding number of home sales.
Although there are plenty of homes listed, the limited number of affordable options are pushing most buyers into bidding wars. According to an analyst with the Canada Mortgage and Housing Corporation (CMHC), 55% of homebuyers were involved in bidding wars in 2017 and 2018, respectively. The average buyer also spent more than their initial budget, thanks to competition created by these bidding wars.
When fewer people can afford the average asking price, it leads to decreased demand and increased supply. Currently, it’s estimated that it would take 29 years of saving for today’s average young person to be able to afford a downpayment on a home. The same article states that overall prices would need to drop by an unrealistic $450,000 in order for young buyers to afford a home.
Foreign Investors’ Influence
Foreign investment remains a hot topic in Vancouver’s housing market. Many locals still see high list prices as a result of foreign investors. These past investments, though now considerably limited by the introduction of BC’s Speculation and Vacancy Tax, are thought to have increased home prices throughout the region. Though prices have remained steady for the past few months, they have yet to drop to an affordable level.
With fewer affordable homes on the market, competition for these properties has increased. Bidding wars may not be an ideal part of buying a new home, but they are often a reality. If you end up in a bidding war, these tips can help improve your chances of securing a home:
- Secure pre-approved financing
- Make a contingency-free offer
- Be flexible with the closing date
- Secure a certified deposit check
- Put your best offer forward
In a market where buyers are more risk-averse, it’s common for the few affordable homes to end up in bidding wars. Lately, bidding wars have been practically inevitable, which can be positive for sellers but not necessarily so for financially-conscious buyers.
Find Your Havn
Whether it’s your first time navigating Vancouver’s real estate market or you’re a seasoned pro, our top REALTORS® can help ease the process. From buying to selling, our team is here to help you find your havn.