The ongoing trend of reduced demand and increased supply extended through April across Metro Vancouver’s housing market. Decreased demand means that the supply of homes for sale continues to accumulate.
The Real Estate Board of Greater Vancouver (REBGV) reports that while residential home sales decreased by 29.1% compared to April 2018, sales saw a 5.9% increase compared to March 2019.
Below-Average Sales Hindered by Government Policy
Last month’s sales were 43.1% below the 10-year April sales average.
“Government policy continues to hinder home sale activity. The federal government’s mortgage stress test has reduced buyers’ purchasing power by about 20%, which is causing people at the entry-level side of the market to struggle to secure financing,” said Ashley Smith, REBGV president. “Suppressing housing activity through government policy not only reduces home sales, it harms the job market, economic growth and creates pent-up demand.”
“There are more homes for sale in our market today than we’ve seen since October 2014. This trend is more about reduced demand than increased supply,” said Smith. “The number of new listings coming on the market each month are consistent with our long-term averages. It’s the reduced sales activity that’s allowing listings to accumulate.”
Metro Vancouver Remains a Buyer’s Market with Continued Downward Pressure on Benchmark Prices
In April 2019, there were 5,742 newly listed properties on the MLS® in Metro Vancouver. These properties included detached and attached homes as well as apartments. This represents a 1.3% decrease from April 2018, and a 16% increase compared to March 2019.
The total number of homes currently listed for sale on the MLS® in Metro Vancouver is 14,357. This number represents a 46.2% increase compared to April 2018, and a 12.4% increase compared to March 2019.
In April 2019, the sales-to-active listings ratio was 9.4% for detached homes, 15.4% for attached homes, and 15.3% for apartments. The overall sales-to-active listings ratio for the month was 12.7%.
According to analysts, downward pressure on home prices generally occurs when this ratio dips below 12% for a sustained period. On the other hand, home prices often experience upward pressure when the ratio surpasses 20% over several months.
The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $1,008,400. This represents an 8.5% decrease from April 2018, and a 0.3% decrease compared to March 2019.
Sales of detached homes in April 2019 saw a 27.4% decrease compared to April 2018.The benchmark price for a detached home is now $1,425,200. This represents an 11.1% decrease from April 2018, and a 0.8% decrease compared to March 2019.
Sales of apartment homes in April 2019 saw a 32.3% decrease compared to apartment sales in April 2018.The benchmark price of an apartment property is $656,900. This represents a 6.9% decrease from April 2018 and remains unchanged from March 2019.
Attached home sales in April 2019 also saw a 22.8% decrease compared to the sales in April 2018. The benchmark price of an attached home is $783,300. This represents a 7.5% decrease from April 2018 and is unchanged from March 2019.
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