January 2023 signalled early that it would end with what the Real Estate Board of Greater Vancouver says is “among the lowest sales month in recent history.”
As of mid-month, total transactions had reached just 334 properties, well below the 795 in mid-December 2022 or the 778 in mid-January 2022. The slow sales reflected not only higher mortgage rates but a barrage of anti-demand government policies that started the New Year.
Having dealt with a City of Vancouver Empty Homes Tax, the provincial Speculation and Vacancy Tax and a provincial foreign buyer’s tax, effective January 1, we now have a provincial three-day Home Buyer Rescission Period (or ‘cooling-off’ period), a two-year ban on foreign buyers across Canada, a national Underused Homes Tax – essentially a Canada wide empty-homes tax for foreign owned properties – and a national anti-flipping tax which would see any profits for sales within a year of purchase taxed as business income. And of course, Canada’s prime lending rate has doubled from a year earlier, due to eight straight Bank of Canada increases.
It is wonder all this didn’t kill home buying all together. Yet a close look at Metro Vancouver shows flashes of high-performing regional markets in January and evidence that, despite misplaced and heavy-handed government policies, many people remain eager to purchase.
January ended with 1,030 properties sold of all types across Greater Vancouver, meaning sales more than doubled in the past two weeks of the month compared to the first half. As well, new listings increased from 1,379 in the first two weeks of January to end with 3,384, but this was still the lowest number of new listings for a January going back to before 1991 – more than thirty years ago.
This speaks to the one thing keeping prices from declining more than they have. Sellers are not desperate. There is a lot of equity in owning a home and that keeps buyers from going into the market and from sellers rushing to get out. Since the start of the pandemic three years ago, the composite home price in Greater Vancouver has increased by 26%, or about $286,000. The typical detached house is now worth $411,000 more than in January 2020, at a January 2023 benchmark of $1,801,300.
If there is one prediction that could be made about this market, it’s that listings will not be coming in abundance.
Despite all the government rhetoric about creating more housing, policies are failing to address the underlying lack of supply. In 2022, for instance, total non-rental housing starts in Metro Vancouver fell 18% from a year earlier to just 16,116 units. And, despite a year-over-year increase in rental construction, Metro Vancouver rents are now the highest in history and the most expensive in Canada.
In some markets, the low inventory sparked bidding wars in January and turned key suburban municipalities into seller’s markets as tenants aimed to move into ownership and owners tried to improve their housing.
Here are some markets bucking the downward sales trend:
A Richmond condo listing attracted 11 offers in January as the local condo market moved from a balanced to a seller’s advantage.
In North Vancouver, townhomes and condos are in a seller’s market with January townhouse sales at similar levels to January 2022.
The strata sector was in seller’s market conditions in North Burnaby, New Westminster and even Coquitlam, despite a multi-family building boom in all three cities.
In 12 of the 22 Greater Vancouver markets, townhouse prices increased from December 2022 to January 2023 and were up an average of 0.8% across the entire region to $1,020,400, while benchmark condo apartment prices rose 1% month-over-month to $720,700.