Metro Vancouver housing is affordable. The market is stable. There is no glut of new condominiums looming. And foreign investors are not driving sales and prices higher.
Exploding popular Vancouver housing myths appeared the theme at this year’s annual Canada Mortgage and Housing Outlook Conference, held November 4 in downtown Vancouver.
“The [Metro Vancouver] housing market is quite balanced,” said CMHC senior market analyst Roybn Adamache, who noted that construction of new homes is keeping near lock step pace with demand; price increases are leveling out and 35% of home sales are to first-time buyers.
While conceding that there is no definitive data on the scale of foreign buyers, CMHC estimates such buyers represent a mere 3% of the residential investment market and just 7% of all sales through the multiple listing service in the Lower Mainland.
Bob Rennie, president of Rennie Marketing Systems and recognized as perhaps the top condominium salesman in Vancouver history, torpedoed the belief that Vancouver homes are too expensive.
Rennie said media and pundits concentrate on the average price of single-family detached houses in the City of Vancouver, which consistently average in the million- dollar range, with condominiums north of $440,000. But, he said, such higher-end sales represent only 20% of the overall market.
For the remaining 80% of buyers, the average detached house is around $670,000 and the average condominium is $316,000, Rennie said.
Rennie added there is no fear of a condo glut forming in the Metro market, despite more than 9,600 units heading for completion by 2015. Sales, he said, are solid in new condo projects from Vancouver East to the Fraser Valley.
“More than 80% of the new condos under construction in Vancouver are already sold,” Adamache said. There is an 11-month supply of new and unsold condos on the Metro market, she said, down from 20-month inventory a year ago.
With 39,000 immigrants expected to arrive in Vancouver every year for the foreseeable future, Rennie said housing starts are tracking close to demand.
Condominium prices are also holding remarkably steady, with an average price increase of less than 3% in the past two years, Admache added, while the average detached house price has increased 6% since 2014.
CMHC forecasts that housing sales in the region will dip slightly to 32,350 units in 2015, down from 32,800 this year, and average overall home price will rise 1.2% to $821,000.
“Overall, the trend is stable,” Adamache said.