Vancouver’s sluggish market sector coming to life
Detached homes could see a boost is sales
Neil Sharma
REP
Vancouver’s single-family detached market could see a boost in sales this autumn.
According to numbers from the Real Estate Board of Greater Vancouver, detached home sales increased 37.1% this past August over the same month last year.
While it will be considerably tamer than it was a couple of years ago when buyers had essentially no bargaining power, they’re in the driver’s seat of a market segment in the midst of moderation.
“For single-family homes, the rate of increase in price over the last couple of years has been nothing short of breathtaking, and we think the market scaling back is healthy,” said Brad Henderson, president and COE of Sotheby’s International Realty Canada. “It will relieve some pressure on some of the other areas that have been quite attractive as well.”
Vancouver’s suburbs have benefitted immensely from the unaffordability crisis that’s gripped the city core because buyers have had no choice but to move there or further out. However, downward pressure on pricing in the single-family detached market might impel a noteworthy cohort to move back into the city.
“In Vancouver, as the centre becomes more expensive, its suburbs become, by default, where people find more attractive and reasonably priced homes, but that means people have to travel furterh away from work and further from family,” said Henderson. “So as prices moderate in the centre, it allows people to come back, which will also soften prices in the markets surrounding the centre of the city.”
Buyers should not become too excited, though. Prices are not expected to drop dramatically, if at all, and the provincial government may once again intervene in the market with new policies.
“At best, prices will go up slower than they have been, or perhaps they come down a little,” said Henderson. “I think the wild card factor that’s really causing some concern in the marketplace is whether there will be additional intervention from the government. If the government declares victory and says they’ve done an effective job shaping demand, where it’s now become more balanced, the market can continue on with confidence. But if there’s a threat of intervention, then we’ll continue seeing softening of prices.”
Mortgage brokers are noticing more activity in the single-family detached market, which slogged along for most of the year. That signifies bargaining leverage for buyers.
“We had a few years where any offer with subjects was a non-starter, so on the buyer side, for clients to be able to take their time and have some negotiating power with sellers is huge,” said Ryan Zupan, a mortgage broker with Dominion Lending Centres City Wide Mortgage Services in Vancouver. “Over the summer, I’ve seen a big pick up of detached purchases from clients waiting on the sidelines. Now they’re getting deals.”
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