Dear Stuart,
In June, the sales activity for detached homes on the Westside remained below the long-term average and the listing activity was below the long term average.
Compared to the 10-year average, the supply of detached homes is up by 3%, while apartments are up 44%, and townhomes are up 54%.
Demand, when compared to the 10-year averages, are down by 21% for detached homes, apartments are down 17%, while townhomes are down by 21%.
Buyers are hesitant to buy and housing supply is rising. However, well priced homes are still selling quickly so astute buyers are able to spot value and act quickly.
In June, the westside Detached Home median price is down 13% from the peak in August 2023. The Apartment median price is same as the peak in April 2022, and the Attached Home median price is down by 16.4% from the peak in June 2023.
The Bank of Canada rate drop of a quarter point which will save a borrower about $150 per month on a $1M mortgage is seen as a move to encourage buyers, spending and to stimulate the economy but it has so far done nothing for real estate on Vancouver’s west side.
The market has been expecting higher inventory levels since the BoC started raising rates and that along with zoning encouraging higher density has resulted in a steady rise in supply of apartments and attached properties while detached supply has gone down.
Some of this shift is a result of the change of use from single family to apartment and multi family developments but it has been bolstered by taxation that discourages ownership of real property over $3M in value. So single family homeowners are being encouraged to sell their homes into duplex & multi family developments which while they will be smaller, will supposedly be sold for more affordable prices.
The CoV has allowed this increased density but it requires large developer expenditures to instal hydro infrastructure and outright payments for the increased square footage while maintaining lengthy wait times for permits through the tree bylaw and electrical oversight.
Demand has responded to higher interest rates by falling in all categories but the surprise has been how prices have remained steady in the face of those increasing costs & supply.
Further rate cuts if they come later this year should encourage demand but we are also further into the mortgage renewal cycle and many mortgage holders have yet to hit their renewal dates under the higher rates….
Have a great summer! 🌺🥥🌞🌊🐚
Best regards
Stuart
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