PRESS RELEASE: The "Real" Real Estate Data

VANCOUVER, June 6, 2019/Kevin Skipworth, Chief Economist at Dexter Realty, publishes his latest fact-based real estate report highlighting the real story behind sales and listings stats.

Having been in the residential real estate business for many cycles we at Dexter Realty believe the Metro Vancouver resale real estate market is primed for a comeback! Never before have we seen sales and listings numbers like we are experiencing right now. Even with monthly sales transactions below that of a typical May and below the 10-year average, fundamentals shown by new and active listing counts demonstrate that, despite some reports painting a bleak picture in real estate, we actually see renewed confidence as evidenced by recent sales and these new and active listing counts. Sales in May were 44% above those in April, as such, it’s not a slumping market, but one with a gasp of breath. Ask REALTORS® how many multiple offers they have experienced in the last month? Lack of Supply is the story!

When you look at the numbers, over the past 20 years we’ve seen 3 significant slow downs in Vancouver real estate. During the periods between 1997 to 1999, 2008 to 2009 and 2012 to 2013 monthly home sales in Greater Vancouver persisted below 2,000 units. In each of these periods, there were either over or close to 20,000 listings on the market. In this current cycle we are seeing the market struggle to get over 15,000 active listings—at a time when the overall housing stock is at its highest! Demand is and will increase, and supply is clearly less than other significant slower markets.

As an example, click on the following link to view a graph of real estate data since 1992 that I created. The numbers are from the Real Estate Board of Greater Vancouver.

The lack of homes listed during one of the slowest markets we’ve encountered in 30 years shows that sellers are not looking to “panic sell”—some will sell out of need and agree to prices below what they would like, others will hold and wait. There is confidence in the Metro Vancouver real estate market long term—with more buyers and fewer sellers, it will lead to stabilization in the market. We may be seeing prices bottom out in the lower and middle end of the market, but there are still great opportunities for buyers, however they are diminishing.

Supply of homes, especially the right supply, will continue to be an issue without being addressed by government at all levels. With increased taxes and costs, as well as restrictive zoning, developers are pulling back and we'll see a lack of new supply and especially the right supply in the next 2 to 4 years. That, coupled with low resale inventories, significant pent up demand, a growing population and Metro Vancouver being a region where people gravitate to, the cycle will continue with demand outstripping supply and prices rising. 

The market is always right—supply and demand ultimately dictates market conditions. The recent intervention on the demand side by the provincial government through taxes and the federal government through the stress test only served to reduce prices significantly in the high end for those the government wanted out of this market and, unwittingly, prevented home buyers from getting into homes in the lower end. Thus affordability overall has not improved and will not get any better without a serious look at the ill-conceived government policies and other factors keeping new homes from making it through the rezoning process to completion.

Kevin Skipworth, B.A. Economics
Partner/Managing Broker & Chief Economist
Dexter Realty
604-868-3656
kevin@skipworth.ca