Housing numbers released this week have confirmed the predictions of some economists and industry experts: Metro Vancouver’s once red-hot market has cooled down substantially — with total sales plummeting to the lowest rate in the region in 18 years.
“Compared to last year, we’re down 32 percent,” explained Phil Moore, president of the Real Estate Board of Greater Vancouver (REBGV).
The organization released its 2018 statistics on Thursday.
“After three or four years of a very robust market and escalating prices, this certainly seemed to be a year of transition. We went from more of a sellers’ market, to a balanced market, and now — a buyers’ market.”
The drop in benchmark price for a detached home accompanied a drastic slump in sales, year-over-year.
The total number of homes sold across Metro Vancouver in 2018 dropped 31.6 percent from 2017, with 24,619 transactions.
That’s the lowest number recorded in the region since 2000, and 25 percent below its 10-year average.
“People used to say, ‘I’d better jump in the market — it’s going to be higher next month,” said Michael Campbell, a business analyst who has long watched and discussed the market in his role as host of ‘Money Talks’ on the Corus Radio Network.
“Now they say, ‘I’d better sit back.’”
WATCH: (Aired Dec. 4, 2018) More evidence of Metro Vancouver real estate slowdown
Campbell said multiple, combining factors are at play when it comes to the market shifting comfortably in the favour of buyers, including rising interest rates, speculation and school taxes, and a recently implemented mortgage stress test that makes it more challenging for first time buyers to enter the market.
“You had an interest rate-driven market going up,” Campbell explained. “That shifted. And it created a psychological change.”
The effects on prospective buyers are also evident in a buildup of active listings, that industry experts say are lingering on the MLS (Multiple Listing Service), and accumulating on a month-to-month basis.
“I wouldn’t say there is a flood of new listings. The listings are quite low, historically,” explained Steve Saretsky, a realtor with Sutton Group.
“It’s just, you have an 18 year low in sales — you have all this stagnant inventory that’s just building, and building and building.”
Moore said that trend has resulted in the largest number of current active listings on the market since the 2008 recession.
“We had interest rates that went up three times. We had additional taxes that were added. And it all caused uncertainty in the market,” he said.
“In the meantime, inventory continued to grow. And so we go into 2019 with 10,000 listings.”
Which could be a positive aspect for prospective buyers come the Spring — which is typically when the region records its highest number of home sales, according to Moore.
“They may see that prices are lower, and there’s less competition. More time to do their due diligence.”
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