Sales and Listing Report for March 2021
Potential Immigration the wild card in Metro housing market
March housing sales skyrocketed more than 126% higher than in March 2020 – the month the COVID-19 pandemic began – to the highest monthly sales pace ever recorded in Greater Vancouver.
The composite benchmark home price leaped 9.9% in March from a year earlier and detached house prices surged nearly 18% higher to all-time high of $1.7 million.
The unprecedented action of 5,843 sales in the month – more than 174 sales every day – blew past housing forecasts and eclipsed the former all-time sales record set in March of 2016, long recognized as the peak year for housing sales in the region.
Dexter agents have been running on the frontline of the current pace, and we are detecting some buyer fatigue, which is understandable. This market can’t continue at this level forever and, as we’ve seen in previous years, March can be the high point of the year for housing sales.
There could be some truth in that theory, but this year and this market is consistently shattering all the traditions.March housing sales skyrocketed more than 126% higher than in March 2020 – the month the COVID-19 pandemic began – to the highest monthly sales pace ever recorded in Greater Vancouver.
February is traditionally a ho-hum period in residential real estate but this year, as with so much of the recent Metro Vancouver market, this February proved exceptional. Housing sales hit the highest monthly level since June 2017, with prices arcing nearly 9% higher than a year earlier to a composite benchmark of $1,084,000. The typical detached house now sells for more than $1.62 million –an average increase of $221,000 from February 2020 – with sales up 80% from a year ago.
Detached houses have been the headline news in Metro Vancouver for the past year, but we believe February marked the beginning of a major shift towards the townhouses and condominium sector.
We believe there is one wild card yet to be played and it could shift the housing market into hyperdrive later this year. This is a potential rebound of international buyers and immigration, which were credited for sparking high home sales in the mid-1980s and in 2016-18 and could do so again in 2021.
In March of 2020 foreign buyers accounted for 24 residential property transactions in Metro Vancouver, despite the provincial 20% tax on homes. But, after COVID-19 travel restrictions hit, that dropped to single-digits per month. We believe pent-up demand and a war chest is building and it could be unleashed on the Vancouver-area housing market later this year.
For instance, according to recent report from the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC), $43.6 billion was transferred from troubled Hong Kong to Canada in 2020, and this, FINTRAC said, does not include transfers via cryptocurrencies, between financial institutions, or transfer under $10,000.
As well, Canada was posting the highest population growth in the developed world prior to COVID-19, according to Statistics Canada, with its 1.4% annual growth rate in 2019 more than twice as high as the U.S. and Great Britain, which tied for second place. The Canadian government has increased its annual immigration quota to 400,000 people per year. The inflow has been stalled by the pandemic but when that ends the rush into Canada will begin. Wild as the current Metro Vancouver market is right now, it may be the calm before the storm.
And with some calls to cool the market, and concern over low interest rates creating challenges when rates do eventually rise, we have to remember that Canada has one of the soundest lending practices in the world and with the current Stress Test in place, buyers are qualifying at rates much higher than we are seeing in the market place right now. So, while demand side measures are easy for governments to tinker with and implement, supply side realities need to be a focus or this rush of demand will once again be pushed into the future and create challenges yet again.
Greater Vancouver: There was a welcome uptick in new listings in March compared to a year earlier, but the new arrivals were not enough to match buyer demand. Listings for detached houses increased 122% from March 2020, but sales increased 124% Townhouse listings were up by 122%, but that was nearly matched by the 112% increase in sales. In the condominium market, 64% more apartments were added to the market compared to a year earlier, but March sales surged 128% higher.
Despite a record-high benchmark price of $1,700,200, detached houses led the March market, accounting for 34% all transactions, compared to a 46% share by the condominium sector. Townhouse buyers accounted for only 19% of the market, but this is partially due to a severe lack of inventory. As of March there was only a one-month supply of townhouses in all of Greater Vancouver. This resulted in multiple offers that drove benchmark townhouse prices in March up 10.4% from a year earlier and nearly 5% higher than in February 2021, to $872,000, a record high.
As we predicted last month, strata sales are ramping up, led by condominium apartments which continue to represent the most affordable housing option. With the benchmark condo price rising an average of 3% per month since last October, it reached $715,800 in March, also an unprecedented high.
Vancouver Westside: The price of a Vancouver Westside detached house in March was $3,286,200. That is up nearly 4% , or about $131,000, from the start of this year, but benchmark detached prices are still 5% below what they were in 2018, so there appears room for further appreciation. There were 148 detached sales in March, which was up from 87 in February and 108 in March 2020. Sales of townhouses in March were very strong, with the 108 sales more than double the 56 sold in the same month last year. The townhouse price reflects this, at a median of $1,550,000 in March, it was nearly $200,000 higher than a month earlier. Wow. The real action was in the condo market, however. With 628 transactions in March – by far the highest of any Metro Vancouver community – the median price spiked to $816,700, up 7.5% , or about $61,000, from January 1 2021.
As an aside, anyone interested in Point Grey real estate should plan to attend a series of public sessions on the development of the 90-acre Jericho Lands ( bound by West 4th Avenue, Highbury Street, West 8th Avenue, and West Point Grey Park) that will run from April 10-19 and outline plans for the biggest residential development in recent Westside history. Register through shapeyourcity.ca
Vancouver East Side: Vancouver’s East Side is seeing an acute shortage of housing, and the entrenched NIMBYism in key SkyTrain-served neighbourhoods will likely keep the supply in check. In March, for instance, there were 384 listings for East Side condos but there were 313 sales, or 82% of all the listings. There is now less than a one-month supply. A major developer has issued a proposal to build 520 condos in three towers on the old Safeway site across from the Commercial-Broadway SkyTrain station but it has already been met with protests. It will be years, before supply matches demand, which points to further increases in East Side condo prices, which were already 3% higher, year-over-year, in March to $619,000.
The townhouse supply is even tighter. Only 11 new townhouses are under construction in East Vancouver and, in the first three months of this year there were just 348 listings of resale townhouses and 68% of them sold. As a result, the median townhouse price reached $1,210,000 in March, the highest level in history. Median detached house prices on the East Side in March hit $1,780,000 as sales more than doubled from a year earlier, to 244 transactions, which, incidentally, is 40% higher than on the neighbouring Westside.
North Vancouver: About 63% of all new listings for detached houses in North Vancouver in March sold, a clear seller’s market, with the benchmark price tracking 19.4% higher from a year earlier to $1,853,000, and up 8.8% from the start of the year.
Townhouse sellers were often dealing with multiple offers in March, a reflection of low supply and high demand, which drove the benchmark price of the 87 sales to $1,075,000, up nearly 10% from a year ago. North Vancouver has a total of 2,863 under construction, but reports show that the inventory of complete and unsold condos was just 25 units available as of March 1. A big new project is underway just west of the Lonsdale Quay, but it will take at least a decade for those 700 new condos to complete. Meanwhile, condo sales were up 105% in March from a year earlier, to 203 transactions, but price increases are moderate, advancing 5.2%, year-over-year to a benchmark of $615,200.
West Vancouver: Detached houses are dominant in exclusive West Vancouver, where the benchmark price for a detached house in March was $3,043,400, up a startling 19.2% from March of last year, a cash increase of more than $540,000. Detached house sales increased 139% from March 2020, to 98, which was more than townhouse and condo sales combined.
Sixteen townhouses sold in March, while 32 condo apartments transacted at a benchmark of $1,143,300, up 11% from the same month last year. This is a sustained seller’s market with the supply of total residential listings is down to 3 month’s supply in March.
Richmond: There is now only a 2-month inventory of total residential units on the Richmond market after sales surged 128% in March from the same period last year, to 786 transactions.
Price increases have been dramatic. The median price of a detached house sold in March was $1,850,000, up nearly $100,000 from a month earlier and $250,000 higher than in March of last year. History has shown that Richmond attracts more buyers from abroad than nearly any other market in Metro Vancouver, so we expect detached prices will continue to accelerate when borders open up, because the 106% year-over-year March surge in new listings is not enough to meet demand. Condominiums, which dominated the Richmond market with 384 sales in March, have seen relative price stability with median prices advancing 6.7% year-over-year to $588,000. But, with a sales-to-new-listing ratio of 74% in March, condos are in a strong seller’s market with multiple offers being seen.
Burnaby East: One of the more affordable markets in Greater Vancouver is seeing intense buyer demand, with total sales up 159% in March compared to a year earlier, the highest increase in Burnaby. Even with a 58% increase in new listings in March, there were just 100 total homes for sale in the community, or about a 1-month supply as of month’s end. The sales-to-listing ratio is running at 69%, which means the supply is dwindling in a seller’s market and prices are rising. If you are a detached-house owner in Burnaby East and have considered listing, now may be a prime time to come to market. The benchmark price of a house was $1,380,700 million in March, up nearly 5% or about $65,000, from a month earlier.
Burnaby North: The final major-brand retailers are moving into the recently completed Brentwood shopping centre development, where thousands of new condominiums have already been built. The massive mixed-use project has spurred demand for all types of homes in the area, with total sales up 158% in March from a year earlier and 74% higher than in February. The large inventory of condominiums – 237 new listings in March – has kept price increases restrained. The benchmark condo price is now $637,600 – about $50,000 below the Lower Mainland average - but with 84% of listings selling in March and most of the new Brentwood condo towers complete, condo values are forecast to increase.
Burnaby South: If you have driven through Metrotown recently you have seen the incredible construction pace that now defines the future of Burnaby’s official downtown. The blast radius of the development is apparent in the sale prices of both detached houses – which have been rising by 7.4% month-over-month this year and reached $1,696,200 in March – and townhouses, where the benchmark price is up 6.6% from a year ago to $819,000. Burnaby South is also as one of the hottest condo sales markets in the Lower Mainland, yet condo price increases are relatively stable, still 6.1% below the 2018 peak at $682,700 as of the end of March. This may represent an opportunity for condo investors.