Ryan Berlin: Real estate demand is robust in the Lower Mainland, particularly south of the Fraser.
On the surface, housing markets across the country seem to be defying the odds as they tally more and more sales alongside a seemingly unending rise in values – despite economic conditions that are the most challenged since the Great Recession of 2008/09.
Here in the Vancouver Region this dynamic certainly rings true, with the 5,933 sales in October representing the most in any October ever in this market, on the heels of a record number of September sales. Comparisons to more recent activity show that October’s sales were 3% higher than in September, 36% more than a year ago, 52% above the past-decade average for the month.
Demand was robust both north and south of the Fraser River, with the Greater Vancouver board area registering just over 3,700 sales in October (29% more than in October 2019) and the Fraser Valley board area counting 2,229 transactions (49% higher than last year).
Additionally, South of Fraser communities (which include Surrey, Langley, and Abbotsford) accounted for 38% of all regional sales in October, including 44% of detached sales and 47% of townhome sales (as well as 24% of all condo sales).
That the South of Fraser market accounts for almost half of ground-oriented transactions does reflect a recent Covid-related shift by buyers, however it’s also part of a longer-term trend that has seen an increasing share of housing market activity taking place outside of the historic centre of the region (Vancouver, Burnaby, and Richmond).
With housing inventory shrinking through the latter half of October and full-month data showing total listings down 9% versus September, down 7% versus October 2019, and 13% lower than the past-decade October average, prices unsurprisingly have continued their upward march. Since the beginning of the onset of the pandemic, for example, benchmark detached prices in the Vancouver Region are 7% higher, those of townhomes are 4% higher, and for condos they’re 1% higher (respective average and median prices are also all higher, both north and south of the Fraser).
Despite the clear negative economic impacts associated with our response to the pandemic, strong demand and a weak supply response has made it harder for new buyers to get into home ownership in recent months.
As we look ahead to the end of 2020 and into 2021, expect demand tailwinds to slow; even if supply doesn’t expand appreciably, this should provide some price relief.
Ryan Berlin is the Senior Economist with rennie intelligence.
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