For the last decade or so, Vancouverites have had a pretty dismal perspective on the state of the housing market. Many young people haven’t been able to afford to buy without help or an impossible mortgage, and for homeowners whose properties have skyrocketed in value, it’s been tough for them to make anything but a lateral move (and are opting instead to renovate or add on to their existing homes).
Luckily, due to a number of factors (including changes to government policy) we’ve now seen the growing price rate slow and have even seen prices drop. While the average price of a detached home is still over $1 million, aggregate home prices in Greater Vancouver dropped by about 5% year over year in the last half of 2019.
So what does this mean for anyone hoping to enter or navigate the Vancouver housing market? Should you buy? Should you sell?
An optimistic outlook
If you’re in the market to buy, things are looking optimistic at the moment. Detached homes have seen the greatest price drop, with the typical value of a single-family home dropping 11% between July 2019 and January 2020. The average price of a condo has fallen by 7%, and attached homes and condos under $700k are expected to see the strongest demand.
Compared to other major markets, Vancouver is looking pretty good. According to the Toronto Real Estate Board, the average price of a Toronto home has shot up by 12% year over year. Detached homes went up by 10% and condos went up by 15%. In a race we usually don’t like to be winning, it feels pretty good to not be in the lead right now.
Should you buy now?
If you were thinking about putting your home on the market to avoid further losses, you might want to wait. Forecasts suggest the market is about to stabilize after a drop. But if you’re in the market for real estate, this could be your best time to jump in. You should do it quickly, though, as the aggregate price is expected to rise again, albeit not to the levels we were seeing five years ago.
However, one realtor cautions prospective buyers to not simply look at the average prices as a gauge of imminent market changes, and that if you’re only considering buying now, you may already be too late. While it may seem like developers are constantly putting up new condos in Vancouver, the supply is currently still restricted relative to the demand, so the lack of competition and available listings may in fact bring prices up again until more inventory is completed.
If you’re hoping to buy but the price is still a concern, consider looking outside of Vancouver proper – Surrey and Langley are currently two of the most affordable municipalities in the Lower Mainland.
What do you think? Are you planning to buy a home in Vancouver this year?