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Shifts in Vancouver’s Market in February with Sales Dipping

Aerial view of a coastal cityscape with skyscrapers and a port near a forested peninsula.

Despite a strong start to the year, according to an Edge Realty Analytics report1, Vancouver’s housing market experienced a slight setback in February, with seasonally adjusted home sales declining by an estimated 2% compared to January. Despite this drop, February sales were still higher when compared to the same period last year, with an increase of nearly 14%.

Two line graphs showing vancouver monthly home sales and monthly change in home sales, both adjusted for seasonality, over a period from april 2021 to march 2023.

Source: Edge Realty Analytics

Sales

Both single-family and condominium sales have seen significant improvements from the levels observed in 2023, but they still fall below what is considered normal for the market.

Bar chart showing year-over-year percentage change in sales for total, condo, and single-family properties in vancouver.

Source: Edge Realty Analytics

Comparative line charts showing trends in single-family home sales and condo sales in greater vancouver from january to december across various years.

Source: Edge Realty Analytics

Listings

The trend of new listings surged once more, following a 15% increase in January, with a further seasonally-adjusted 12% rise recorded in February. This rise was also a significant 32% increase compared to the same period last year.

In February, Vancouver’s housing market experienced a shift in balance, with declining sales and increasing new listings. This resulted in a softened market condition, indicating a more favourable environment for buyers. The sales-to-new listings ratio fell to 45%, its lowest level since October. 

Two bar graphs depicting vancouver real estate trends: the left graph shows a fluctuation in monthly new listings from 2020 to 2023, excluding an outlier in may 2020, while the right graph presents year-over-year percentage changes in new listings for townhouses, condos, and single-family homes.

Source: Edge Realty Analytics

Fluctuations in vancouver's sales-to-new listings ratio over time, after seasonal adjustment.

Source: Edge Realty Analytics

Inventory

Inventory also saw an increase, rising by 16% compared to last February, with a notable 18% increase observed in the condo segment. Despite the sluggish sales, inventory levels remain within the normal range for this time of year.

A pair of graphs depicting real estate trends: the left graph shows active mls listings in vancouver by year, and the right graph shows the year-over-year percentage change in active listings in vancouver broken down by property type.

Source: Edge Realty Analytics

A comparison of single-family and condo inventory trends in greater vancouver over several years, shown in two line graphs.

Source: Edge Realty Analytics

Pricing

Vancouver saw the end of a four-month trend of declining prices in February, with the MLS Home Price Index (HPI) registering a 0.2% month-on-month increase. Compared to the previous year, prices have risen by 4.6% overall and by 6.5% in the single-family segment.

Two bar and line graphs depicting monthly changes and historical trend in vancouver's mls housing price index.

 

Source: Edge Realty Analytics

Trends in house price appreciation for detached, composite, and condo segments in greater vancouver from 2010 to 2024, based on mls hpi data.

 

Source: Edge Realty Analytics

Construction

However, there’s concerning news regarding single-family construction activity, which experienced a significant decline. While the overall number of dwellings being built across Vancouver saw a marginal increase of 0.3% in January, this was solely due to a 1.7% rise in rental construction. In contrast, the construction of single-family homes dropped by another 2.3% and has plummeted by 12% over the past five months.

Graph showing the trend of dwellings under construction in vancouver, with condos, rentals, and single-family homes from 1990 to 2020, indicating a sharp rise in condo constructions.

 

Source: Edge Realty Analytics

Similar to the situation in Toronto, metro Vancouver is witnessing a steep decline in single-family housing starts, with levels nearing those seen in 2020. This downward trend is likely to continue, given the trends in permits across BC. This shortage in new supply raises concerns about long-term housing availability.

Twin graphs depicting a 12-month rolling trend of single-family housing starts in vancouver and single-family building permits in british columbia over several years.

Source: Edge Realty Analytics

Overall, while buyers may benefit from potentially lower prices in the short term due to current market trends, high interest rates and affordability issues, the scarcity of single-family housing supply in the coming years will likely create a bottom line. While buyers may find temporary advantages from lower prices, the overall supply shortage suggests other, long-term implications of this trend, such as the potential stability and value retention over time.

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