Housing sales in September were 20.8% above the 10-year average while the new listings were 1.2% below the 10-year average. And the total number of homes listed is 27.7% below the 10-year average. The above average sales matched up with the below average inventory means upward pricing pressure. A measure of this supply and demand dynamic is the sales-to-active listings ratio. Extended periods over 20% typically means an increase in prices. For detached homes, this ratio is 25.5% and the price increased 1.2% over the last month. For townhomes the ratio is 53.1% and the price also increased by 1.2% over the last month. For apartments, the ratio is 36.7% and the price increased by 0.5% over the last month.
A Re/Max’s recent report estimates a 2 to 5% in the increase of Vancouver home prices till the end of the year which is not hard to imagine given September’s numbers. Besides the sales/inventory situation, the Greater Vancouver Real Estate Board cited the low interest rate environment and improved employment landscape to back their forecast of continuing upward pricing pressure. CMHC also put out their housing market assessment report. It looks at several factors of the real estate market in 14 cities in Canada and rate their risk for a housing downturn. Vancouver is the only city in that report that improved its rating. The risk of a market correction went from moderate to low, while Toronto, Ottawa, Montreal, Hamilton, Moncton and Halifax are all under high risk of a market downturn. So it looks like smooth sailing for now. Well, at least for Vancouver. Where the market will go next may be dependent on whether the Liberals will keep their election promises on tackling the housing affordability issue.
