The Market Watch #01

Vancouver Real Estate Trends.

Author

Gerald Chan
March 06, 2024

0️⃣1️⃣

Welcome to the Inaugural Issue of The Market Watch.

 
We comment on Trends in the Vancouver Real Estate Market.

Since the Bank of Canada Announcements are important milestones on the Real Estate Landscape, we publish a new issue at each Announcement.

We trust you find this information valuable. Let’s catch up again on April 10th 2024.

Ciao 👋
Gerald ;)

BANK OF CANADA UPDATE
Bank of Canada keeps it Policy Rate at 5%

HELD AT 5% !!!

From Buyers to Sellers and everyone in between, The Canadian Real Estate industry has waited with bated breath for this Announcement.

My thoughts last week were that the BOC would hold its rate at 5% even though inflation has dropped to 2.95% … as a safety measure to guard against a possible rebound.

Well, my thoughts were confirmed this morning. The Rate has been held at 5%

So what’s next? Business as usual!

Borrowing still expensive but the Good News is that the rate didn’t go up 🫣and things are looking better👍

VANCOUVER, RICHMOND AND BURNABY HOME PRICES
What is a “Typical” Single Home Selling for?

The Benchmark Price aka Home Price Index is a convenient way to track Home Prices over a period of time. Through the “Magic of Computer Models” analysts have been able to compute the Price of a Typical Home.

In spite of relatively high borrowing costs, the Data shows that the Price of “Typical” Single Family Homes have increased modesty compared to 12-months ago.

Richmond saw a 1.1% increase, Vancouver 6.7% with Burnaby leading the way at 8.4%.

“TYPICAL” HOME PRICES

The fact that we are currently experiencing a shortage of units together with a large number of families making Metro Vancouver home, prices are unlikely to fall bar some catastrophic event

If you’d like to following these trends along with me please Subscribe.

BUYER, SELLER OR BALANCED MARKET?
What does the Data Show?

Real Estate Prices are a function of the Supply and Demand for properties. If we divide the number of Sales by the number of Listing we get the ”Sales to Active Listings” Ratio.

Analysts believe that if this Ratio, expressed as a percentage, falls between 12% and 20% we have a Balanced Market. This means that the Supply of properties available roughly matches the Demand so there is no motivation for Prices to move up or down.

If the Ratio dips below 12%, the number of homes Listed for Sale is relatively greater than the Demand. This is the Buyer’s Market. Buyers have more choice and we can expect prices to be pushed down - or at least, sellers will be more open to negotiate.

If the Ratio is above 20% the opposite is true. The Demand is relatively greater that the Supply. We are in a Sellers Market. Buyers don’t have much to choose from and Sellers are less open to negotiate.

So can you tell in which market we are in?

SALES TO ACTIVE LISTING RATIO

If you say “Balanced” you are correct, but it looks like we’re heading into a “Seller’s Market” for Vancouver and Richmond with Burnaby still undecided.

We see in the Graph 👆 above, Burnaby home prices jumped 8.4% compared to this time last year so Burnaby may remain in a Balanced situation for now.

How will the Marker perform - what’s your guess? Our next Newsletter comes out on April, 10th.

IN THE NEWS
Is HOME CO-OWNERSHIP Becoming a Thing?

Is buying a home is still within the reach of a normal family? It’ll be a Challenge but if there is a “will” there may be a way … it won’t be easy and “You Gotta Wanna!”


The Media is picking up on the fact that home prices are up and the idea of “Co-Ownership” is doing it’s rounds.
There are even “matchmaking” Apps like “Husmates” and service providers like “CoHo BC” all seeking to address the dilemma by matching individuals interested in Co-Ownership.


Co-Ownership is not a new phenomenon but may be one solution for some. Would you consider Co-Ownership?

Click on image below👇🏼for some pros and cons

Home Co-Ownership for You?

Co-Ownership is receiving a lot of attention in the Media as a result of high home prices and interest rates.Is home co-ownership for everyone - what are the...

bit.ly/4c07xrF

THANK YOU
For Subscribing to my First Ever Newsletter 👍🏼

We have a few ideas up our sleeves for future editions, but since this is Vol 1 we’ll just keep this one short and simple.
In future editions we plan to fold in:

  • Rental Data for Vancouver, Richmond and Burnaby

  • Visits to Pre-Sales Presentation Centers in Richmond, Vancouver and Burnaby

  • Richmond Neighbourhood Tours - and just for Fun …

  • The Richmond Foodcourt & Coffee Shop Crawl

If you have any ideas on categories we should add, please feel free to reach out - we look forward to hear from you :)