Happy New Year WeLoveEastvan.com readers! We hope you had a good and relaxing holiday season. The real estate market is slowing waking up from it’s annual holiday slumber, and with new mortgage changes now in place, so it will be interesting to see how things unfold. The new mortgage changes can decrease affordability for any Buyer who has at least 20% down, which would include any investors (second properties often require a higher down payment), detached house Buyers and most townhouse Buyers (as anything over $1-million requires at least 20% down). This means we could see a stall in the market as townhouse buyers will find it hard to jump into a detached house, and if townhouse buyers don’t move up, condo buyers can’t move up into townhouses, and so we won’t see as much inventory in any market. If the price of livable and affordable detached houses drop, then this chain of buying and selling can keep the market going for everyone looking for a new home.
One thing to note is that these new mortgage rules were instituted for Buyers with less than 20% down in the Fall of 2016, and it didn’t affect the market, though I admit that detached Buyers are working with higher debt loads, so the effect may be much different.
The market stats in this report are based on December’s data, which is a month that often skews the data. There are few new listings this month, and existing listings are removed from the market (often to be re-listed in the New Year). Many Buyers and Sellers focus on holiday activities so there are generally fewer sales compared to other months. By this time in the year, some Buyer fatigue may have set in, leading Buyers to take a few weeks off, though with the new mortgage rules coming into play, there may have been a run up in sales before the end of the year.
The condo, townhouse and detached house markets are all different market, so let’s quickly dive in to each one. Scroll down for graphs of the market stats.
East Van Condos: Inventory dropped in December (as expected) though 2017 proved to have the lowest inventory numbers in the last 5 to 10 years. The sales price dropped slightly in each market: low to mid-$500k’s for 1 bedroom condos and about $700k for 2 bedroom condos. The 3 bedroom condo stats are skewed by Leasehold units in the Fraserview area, which is why you see significant changes in price (most 3 bedroom condos in the city are close to $1-million, while a 3 bedroom Leasehold in Fraserview is almost half that amount). The sales to active ratio is still very high for each condo market – making it a strong Seller’s market. The new mortgage rules and average prices that don’t offer a good rental cap rate might keep some investors out of the condo market, opening up some opportunity for end users and putting a hold on ever-increasing prices. Regardless, this market needs to see a dramatic increase in inventory or fewer Buyers.
Check out my full East Van Condo Market Update here.
East Van Townhouses: East Van townhouse inventory dropped in December, and unlike the condo market, 2017 had, in general, more inventory than 2016. This is likely due to a number of newly developed (albeit boutique) townhouse complexes hitting the market. The townhouse market is still a Seller’s Market, though at almost 30%, is nearing balanced territory. The average sales price has been trending upwards, and is now closer to $1-million (though expect to pay more than that if you’re looking in the more popular neighbourhoods closer to downtown).
Check out my full East Van Townhouse Market Update here
East Van Houses: The detached house market has been the most interesting market over the last few years. The detached market has been in Balanced territory since the Spring of 2017, though it was showing some signs of increasing at the ed of this year. This could have been due to a big drop in Inventory (down about 25% in December) so we’ll see if the inventory increases agin in the new year (with these cancelled listings being re-listed), and if these Sellers are dropping their price. Interestingly, the average price for a detached house is up, though the HPI price is down, which means the higher end market in East Van (likely over $1.8-million) is still moving. Based on what I’m seeing on the ground, the entry-level detached market (cute, livable houses on smaller lots) is also very busy with Buyers.
Check out my full East Van House Market Update here.
I don’t expect inventory to increase significantly until mid-February or March. I do expect Buyers who have a pre-approval locked in under the old rules and rates to be eagerly looking. Having said that, interest rates are going up slightly, and we may see a bit of a “wait and see” attitude from some Buyers. If you haven’t spoken with a mortgage broker recently about your affordability, do so (we suggest these folks: Pinsky Mortgages)! In addition to the new mortgage rules, rates and rising slightly and you need to know what to expect, and if they’re anything you can do now to prepare to purchase a property. Mortgage Brokers can be helpful in getting you prepared by offering advice on how to increase your credit, which loans to pay off or how to structure a purchase well before you get there.
Keep in mind that the numbers vary depending on neighbourhoods and types of properties, so if you would like more information on a particular type of home or neighbourhood, let us know and we’ll give you the stats.
(Green is Detached Houses, Blue is Townhouses, Orange is Condos)
Sales to Active Ratio:
Home Price Index (HPI) Price:
Our team has a few great new listings hitting the market this month or early in February, and we’re getting calls from new Sellers, so keep your eyes on the site for a variety of interesting new listings. As always, if you want to chat real estate – either buying or selling – shoot me an email 🙂