There’s a changing dynamic in the Metro Vancouver real estate market, that includes Maple Ridge and Pitt Meadows.
The bubble hasn’t burst, but it’s certainly deflating.
Home sales dipped below the 10-year monthly sales average last month.
Metro Vancouver home sales totalled 2,253 in September 2016, a decrease of 32.6 per cent from the 3,345 sales recorded in September 2015 and a decrease of 9.5 per cent compared to August 2016 when 2,489 homes sold.
Last month’s sales were 9.6 per cent below the 10-year sales average for the month.
“Supply and demand conditions differ today depending on property type,” said Real Estate Board of Greater Vancouver (REBGV) president Dan Morrison. “We’re seeing more demand for condominiums and townhomes today than in the detached home market.”
The total number of homes currently listed for sale on the MLS system in Metro Vancouver is 9,354, a 13.4 per cent decline compared to September 2015 (10,805) and a 10 per cent increase compared to August 2016 (8,506).
The sales-to-active listings ratio for September was 24.1 per cent. This is the lowest this ratio has been since February 2015.
Generally, analysts say that downward pressure on home prices occurs when the ratio dips below the 12 per cent mark for a sustained period, while home prices often experience upward pressure when it surpasses 20 per cent over several months
“Changing market conditions are easing upward pressure on home prices in our region,” Morrison said. “There’s uncertainty in the market at the moment and home buyers and sellers are having difficulty establishing price as a result.”
How much of this decline has to do with the recently implemented BC Foreign Buyers Tax (FBT) in Metro Vancouver?
Not as much as you think, according to the Canada Mortgage and Housing Corporation, which recently released a Housing Market Insight (HMI) report on the tax.
On July 25, the province implemented an additional property transfer tax of 15 per cent on home sales to foreign buyers.
According to the corporation, preliminary analysis of resale data suggests the market was slowing down prior to the tax’s introduction.
According to the corporation:
• Prior to the tax’s introduction, Vancouver was seeing a slowing pace of sales, an ongoing market shift to more condominium sales and a downward trend in average prices, and
• MLS sales declined following the start of the tax, continuing an already established trend, particularly at the higher end of the price spectrum.
The MLS Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $931,900. This represents a 28.9 per cent increase compared to September 2015 and a 0.1 per cent decline compared to August 2016.
However, the sales of detached properties in September 2016 reached 666, a decrease of 47.6 per cent from the 1,272 detached sales recorded in September 2015.
The benchmark price for detached properties is $1,579,400. This represents a 33.7 per cent increase compared to September 2015 and a 0.1 per cent increase compared to August 2016.
House prices inched up ever so slightly in Maple Ridge (one per cent) and Pitt Meadows (1.2 per cent) from August to September.
Last month, the benchmark price for a detached house in Maple Ridge was $719,900, and $793,600 in Pitt Meadows. That’s still a 37 per cent increase in price in Maple Ridge and a 34.9 per cent jump in Pitt Meadows from September 2015 (Benchmark represents a typical property within each market).
Townhouses (benchmark $398,00 in Maple Ridge and $474,900 in Pitt Meadows) actually dropped in price in both cities from August to September. It was a slight stumble: 2.6 per cent in Maple Ridge and 0.9 per cent in Pitt Meadows.
Meanwhile, apartments inched up 1.7 per cent in price in Maple Ridge ($203,900) from August to September and two per cent in Pitt Meadows ($305,200) over that same time period.
The two communities combined led the way in one category of real estate sales last month, among the 16 regions covered by the REBGV.