The greater Vancouver condo market is beginning to shift. Condo sales have long carried the Vancouver real estate market. With single home sales hitting record lows and Vancouver’s affordability decreasing each month, condo sales have remained robust. For years, condo sales have remained robust in the face of continuously declining inventory levels. This limited availability has pushed prices upward. As of May of 2018, condo prices in the Fraser Valley were up as much as 42% every year. However, in light of Vancouver’s decreasing accessibility, this trend is beginning to shift.
December of 2017 saw a ten-year low for Vancouver condo sales, and inventory has climbed higher each month since. Some of this static is due to a seasonal trend; not many people want to buy condos in the winter. However, these increases are far from normal. Condo inventory levels are increasing by 40% each year in Greater Vancouver and by 48% in the Fraser Valley. This has been the single largest percentage increase since May of 2007.
Condo sales dropped as much as 30% in May while sales decelerated in June. The average price per square foot officially peaked in January of 2018. Now, more than six months later and despite the busy spring selling season, the average price per square foot is $1,034—still an increase, but smaller than what is expected.
The declining number of buyers has begun to stabilize condo prices. Vancouver condo sales sank 32% in June—there were a total of 475 sales, which is the lowest since June of 2012. The condo market now faces both a record supply of new units under construction and housing starts. Perhaps this decline is due to lack of affordability in the area, or perhaps the Vancouver real estate market has scared off potential buyers. Maybe families are moving farther into the suburbs to purchase or build their own detached or single-family homes. The latest news we’ve seen for the greater Vancouver housing market hasn’t been encouraging, either. Whatever the case, this trend may endanger the area real estate market as the gap between available housing and interested buyers continues to grow.