Once Canada’s most fiercely competitive real estate market and famed for its bidding wars, Greater Vancouver is now the second-least competitive housing market in the country, according to a new study by real estate website Zoocasa.
Metro Vancouver residential sales see coolest July in 18 years
In its analysis of nationwide listings and sales data, Zoocasa found that, of the major real estate markets, only Newfoundland and Labrador was in a true buyer’s market, followed by Greater Vancouver and the Fraser Valley.
The website used sales-to-new-listings ratios to determine the state of the new market (as opposed to sales-to-active-listings ratios that are reported monthly by real estate boards). With this measure, a buyer’s market is indicated by anything under 40 per cent of new homes listed being sold that same month. Between 40 and 60 per cent it is a balanced market, and above 60 per cent it’s a seller’s market.
The study found that Greater Vancouver was at 43 per cent in July 2018, second-lowest only to Newfoundland and Labrador’s 35 per cent. The Fraser Valley was at 45 per cent.
The report said of these markets, “Those looking to ascend the property ladder in these cities will encounter fewer competitive hurdles such as bidding wars, as the sales are too few to outweigh new inventory.”
The regions in the strongest seller’s markets were London and St. Thomas at 78 per cent, Montreal at 73 per cent, and Ottawa and Trois Rivieres in joint third, both at 72 per cent.
The study also looked at the areas with the greatest year-over-year decreases in their sales-to-new-listings ratios. B.C. dominated the declines, with Fraser Valley seeing an annual decline of 15 percentage points, Greater Vancouver down 13 percentage points and Victoria dropping 12 percentage points (although still high at 62 per cent).
Zoocasa’s report said, “The last couple of years have been tumultuous in real estate markets across Canada, as a new mortgage stress test has further crimped affordability for borrowers of new mortgages. British Columbia, in particular, has weathered considerable challenges, as tougher mortgage hurdles compound with foreign buyer and speculation taxes, making steep affordability even more acute, and dampening home buyer demand. [These markets] have seen the greatest year-over-year declines in their sales-to-new-listings ratios, indicating faster rates of cooling competition.”
However, the study doesn’t account for differences between varying property types. The region’s latest board stats suggest that while Greater Vancouver is indeed in a balanced market overall, that breaks out as a buyer’s market for detached homes, a seller’s/balanced cusp market for attached units, and a seller’s market for condos.
Check out the infographic below for the nationwide study results.