Greater Vancouver condo sales bounced 9% year-over-year this August. This brought condo sales roughly in line with their 10 year average. Keep in mind these sales are not adjusted for population growth and/or the growth in the housing stock.
We are seeing weakness in two and three bedroom condos, particularly the higher up you go. There is still lots of activity for one-bedroom condos as first-time buyers try to squeeze into the housing market. This is perhaps best reflected in the sales actives ratio for one-bedroom condos which shows a ratio of 28%, this is indicative of a seller’s market, although I’d still be hesitant to suggest that sellers truly hold the upper hand in negotiations.
Buyers are still relatively picky, opting to neglect older less desirable buildings, particularly those with rental restrictions or pet restrictions. Most of the demand in the condo market is funneling into newer one bedroom units that are reasonably priced. However, again we like to emphasize context, the percentage of one-bedroom condos that sold over the asking price slipped to just 8% in August. This is down from 17% last year, and down significantly from a cycle high set back in June 2017 when 62% of one-bedroom condos sold over the asking price.
So, in essence sales are back in line with historical averages, mortgage rates remain incredibly low, and inventory continues to slowly build- up 23.5% from last year. As a result, there is 4.6 months of inventory for sale which suggests we are in a balanced market.
However, this did not stop prices from registering another year-over-year decline. The MLS benchmark shows condo prices slipped 7.4% annually. Although, the MLS benchmark is notorious for being a lagging indicator. If we look at the average price per square foot, we can see that prices are flatlining. This goes hand in hand with what we are seeing from a feet on the ground perspective. The should not be a surprise though, considering there is just 4.6 months of inventory for sale, it’s not like we’ve been flooded with a whole bunch of inventory, although that could certainly be the case in the near future as new supply completes. There are still a record 45,000 new homes under construction in Greater Vancouver.