Photo: Jack Church / Unsplash
It’s no secret that Vancouver’s real estate market has been start-and-stop for a few years now — federal stress tests and other government interventions have played a role in dampening sales and dropping prices across the West Coast city. While Vancouver still remains one of the world’s most unaffordable markets, prices show signs of a slow decline, particularly in one segment of the upper end of the market.
This week, Royal LePage released a market forecast report that analyzed luxury home price data in both the new and resale markets from five of Canada’s major cities across a 12-month period, which concluded on January 31st, 2020. While luxury home prices in Montreal experienced a growth spurt, alongside Toronto’s high-end condominium market, Vancouver was one of the few cities that saw price depreciation across the board.
Luxury detached homes in Greater Vancouver were found to have dropped 6.7 percent year-over-year, scaling back to a median price of $5,394,594. Condos also took a hit, falling 4.4 percent to $2,411,773.
While price growth has been faltering, a boost in sales towards the end of 2019 pushed Vancouver closer to market stabilization. From October 31st to January 31st, 2020, price decreases were minimal — the median price of a luxury home in Greater Vancouver fell by 1.3 percent year-over-year, while condo prices remained flat. This stagnation boosted prices slightly, a 0.2 percent year-over-year increase, but injected more balance into the market.
“Vancouver’s residential real estate market is shifting towards a balanced market and this trend has been moving upward through the luxury market,” said Jason Soprovich of Royal LePage Sussex in the report. “There is healthy demand for homes priced between $3 to $5 million and this segment is starting to stabilize. It will take more time for the upper-end segment to move into a balanced market but it is expected.”
Looking into 2020, Vancouver buyers shouldn’t expect prices to drop overnight. Instead, the forecast is anticipating a slow and steady decline. A year from now, luxury homes in Vancouver are expected to descend further by two percent. Luxury condos will also likely dip by 1.5 percent.
Still, as luxury prices are dropping, momentum for the spring market is said to be building with January home sales seeing a large 44 percent year-over-year increase, according to data from the Canadian Real Estate Association (CREA). To stand out, Soprovich says that sellers will need to deploy the right listing strategy before entering the market.
“To be competitive, sellers need a good marketing strategy from the start or they risk missing opportunities or, if they overprice the property, they could lose credibility,” he noted.
