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The Fifth Dimension Third Quarter 2018 Market Report

Fifth Avenue is a full-service, suburban market-focused, residential real estate sales and project marketing organization with over 39 years of experience. It is our pleasure to welcome you to the Third Quarter edition of the Fifth Dimension, highlighting stronger summer market performance than expected. Our values include collaborative, mutually beneficial relationships and in that spirit each and every quarter we share market intelligence and perspectives with respect to the new multifamily home market in Metro Vancouver.

This next to final edition of this report for 2018 outlines the present new multifamily market conditions being experienced of late and provides a succinct commentary with results and trends and raises questions for contemplation.

To ensure the supporting data for this Third Quarter 2018 edition is objectively collected and presented, we collaborate with highly regarded Urban Analytics (UA) a leading provider of advisory services on the new multifamily home market. UA has been tracking the new multifamily home market in Metropolitan Vancouver since 1994 and has been a vital contributor to this report since its inception in the First Quarter of 2010.

Our aim is to provide a comprehensive, concise, informative and thought-provoking summary regarding new home sales, the majority of which are not recorded in MLS.

As always, feel free to share this report as widely as you see fit.

Click here to download the full report.

Fifth Dimension Complimentary Report – Q2 2018

The second edition of our complimentary report on the multifamily residential real estate market in Metro Vancouver for 2018, The Fifth Dimension, has been released. The mid-year edition of this report furthers our efforts producing and sharing a succinct summary of market activity and commentary. As in years past, it is also the installment in which we share our first prognostications through to year-end and into 2019 and raise relevant issues for consideration.

Despite early quarter indicators supporting another 4,000+ units sold, a deceleration in sales activity in more central markets such as Downtown Vancouver led to a shortfall and sale mark of 3,254 new multifamily homes sold. This is the first quarter in nearly two years not to exceed the 4,000+ new units sold, our take on a peak performance market indicator. The market climate is shifting to be sure, but the sky is not falling. We are transitioning from a “supercycle” into a totally addressable, more normal market.

Some may dramatize this for effect using words like “plummet” or “crash”. Is this really the case? Or have costs and a lack of supply in contrast simply driven prices to ceilings that are causing more moderate demand with a number of exceptions including the Fraser Valley market for Condominiums and entry-level Townhomes. In this issue, we also highlight significant increases in hidden and not so hidden development and construction costs and surmise that increased costs will not enable major price adjustments for the foreseeable future.

Our aim is to provide a comprehensive, concise, informative and thought-provoking summary regarding new home sales, the majority of which are not recorded in MLS.

Click here to download the full report.

Canadian Data Release: Housing starts

Canadian Data Release: Housing starts dip in March but remain elevated

  • Canadian housing starts edged lower to 225.2k (annualized) units in March, down 2.5% from February’s upwardly revised figure (231k) but still an elevated pace of homebuilding. The underlying trend in starts ticked higher to 227k over the last six months.
  • Single-detached starts advanced 8% to 76.6k units with the gains offset by a decline in the multifamily segment, where starts were down 7% to 148.6k units.
  • March’s drop was concentrated in Ontario (-31k to 75k units). This was expected after starts posted an unsustainable gain in February. Starts also dropped in Nova Scotia (-2.3k to 3.1k units) and Saskatchewan (-1.4k to 2.2k units). On the flip side, starts were higher in most other provinces, led by B.C. (+15.5k to 49.4k units), Newfoundland and Labrador (+5k to 6.3k units) and Alberta (+3k to 37k units). Starts were largely flat in PEI during March.
  • Starts were down notably in Toronto (-33k to 38.3k units), owing to a drop in the multi-family sector from an unsustainably heated pace. Starts also declined in Montreal (-6.7k to 20.3k units). Conversely, starts were higher in Vancouver (+12.2k to 32.4k units).

Key Implications

  • Homebuilding continues to defy gravity, with another strong print for starts in March. Over the past six months starts have averaged a solid 227k, with healthy population gains and on-going economic growth providing a boost for demand. Builders are also responding to past increases in pre-construction condo sales, a factor that should provide some support to starts going forward.
  • In the first quarter, starts averaged 227k, about in line with their fourth quarter level. While new housing construction is holding up, a plunge in home sales suggests that residential investment will subtract notably from Q1 growth.
  • Going forward, starts will likely ease from their solid Q1 pace, in light of rising interest rates, regulation, and a softer price environment. However, recent permit issuance points to only a gradual moderation.

Fifth Dimension Complimentary Report – Q4 2017

Activity in Metro Vancouver’s new multifamily home market was robust to end the year and is projected to continue in 2018. In the final quarter of 2017 an overall total of 4,276 new multifamily home sales were reported. Predominant purchasers this quarter were both end users taking advantage of pre ‘stress-test’ interest rates and investor buyers seeking pre-sale condominium product. This figure was up four percent from last quarter and was similar to the same quarter last year. Of note, projects in the Fraser Valley represented 42 percent of Fourth Quarter sales in Metro Vancouver which is nearly double the mark set the year prior. This trend is projected to continue.

Click here to download the full report

Home buyer demand depends on property type

Attached and apartment homes are in demand across Metro Vancouver while detached home buyers are facing less competition today.

The Real Estate Board of Greater Vancouver (REBGV) reports that residential home sales in the region totalled 1,818 in January 2018, a 19.4 per cent increase from the 1,523 sales recorded in January 2017, and a 9.8 per cent decrease compared to December 2017 when 2,016 homes sold.

Last month’s sales were 7.1 per cent above the 10-year January sales average. By property type, detached sales were down 24.8 per cent from the 10-year January average, attached sales increased 14.3 per cent and apartment sales were up 31.6 per cent over the same period.

“Demand remains elevated and listings scarce in the attached and apartment markets across Metro Vancouver,” Jill Oudil, REBGV president said. “Buyers in the detached market are facing less competition and have much more selection to choose. For detached home sellers to be successful, it’s important to set prices that reflect today’s market trends.”

There were 3,796 detached, attached and apartment properties newly listed for sale on the Multiple Listing Service® (MLS®) in Metro Vancouver in January 2018. This represents an 8.3 per cent decrease compared to the 4,140 homes listed in January 2017 and a 100.7 per cent increase compared to December 2017 when 1,891 homes were listed.

The total number of properties currently listed for sale on the MLS® system in Metro Vancouver is 6,947, a four per cent decrease compared to January 2017 (7,238) and a 0.2 per cent decrease compared to December 2017 (6,958).

For all property types, the sales-to-active listings ratio for January 2018 is 26.2 per cent. By property type, the ratio is 11.6 per cent for detached homes, 32.8 per cent for townhomes, and 57.2 per cent for condominiums.

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.

The MLS® Home Price Index composite benchmark price for all residential homes in Metro Vancouver is currently $1,056,500. This represents a 16.6 per cent increase over January 2017 and a 0.6 per cent increase compared to December 2017.

Detached home sales in January 2018 reached 487, a 9.7 per cent increase from the 444 detached sales recorded in January 2017. The benchmark price for detached properties is $1,601,500. This represents an 8.3 per cent increase from January 2017 and a 0.3 per cent decrease compared to December 2017.

Apartment home sales reached 1,012 in January 2018, a 22.7 per cent increase compared to the 825 sales in January 2017. The benchmark price of an apartment property is $665,400. This represents a 27.4 per cent increase from January 2017 and a 1.5 per cent increase compared to December 2017.

Attached home sales in January 2018 totalled 319, a 25.6 per cent increase compared to the 254 sales in January 2017. The benchmark price of an attached unit is $803,700. This represents a 17.5 per cent increase from January 2017 and unchanged compared to December 2017.

Click here to download the full package.

Another big year for Fraser Valley real estate

SURREY, BC – The Fraser Valley housing market had its second highest selling year on record in 2017, with total MLS® transactions and dollar volume sold behind only 2016’s unprecedented level of activity.

The Board’s Multiple Listing Service® (MLS®) processed 22,338 sales in 2017, 7.3 per cent less than the record of 23,974 sales set in 2016. The total dollar volume of MLS® sales was $15.7 billion, coming out slightly beneath 2016’s record setting total dollar volume of $16.2 billion.

Of the total transactions for the year, 5,198 were townhouses sold and 6,183 were apartments, together representing over half of overall market activity for the region. This was also the highest total annual sales for apartments in the Board’s history.

“Much of the market’s momentum through 2017 came from the incredible shift in demand to attached-style homes, particularly in our larger communities,” remarked Gopal Sahota, President of the Board.

“While prices continued to see slight gains month-to-month, a lot of our attached inventory remained affordable and an excellent option for consumers of all types.”

For inventory, a total of 32,651 new listings were received by the Board’s MLS® system, the third highest in the Board’s history after 2016 (34,768) and 2008 (35,651).

Last month the Board processed 1,344 sales, the second-most transactions for a December on record in the Fraser Valley. December inventory finished at 3,818 active units, with a total of 1,277 new listings entering the market throughout the month.

Sahota adds, “All year, supply levels remained below where we’d like them to be, and that has put a tight grip on inventory and pressure on the pace of the market. This is still a challenging market for many consumers.

“However, if you have your finances in order, and the support of a local REALTOR® who fits your needs, you’ll be in the best position to make a move in 2018 and find success.”

HPI® Benchmark Price Activity

• Single Family Detached: At $976,400, the Benchmark price for a single family detached home in the Valley increased 0.4 per cent compared to November 2017, and increased 14.2 per cent compared to December 2016.

• Townhomes: At $513,100, the Benchmark price for a townhouse in the Valley increased 1.5 per cent compared to November 2017, and increased 23 per cent compared to December 2016.

• Apartments: At $388,600, the Benchmark price for an apartment in the Valley increased 3.2 per cent compared to November 2017, and increased 40.5 per cent compared to December 2016.

Full package:
http://www.fvreb.bc.ca/statistics/Package201712.pdf

Steady sales and diminished listings characterize 2017 for the Metro Vancouver housing market

After reaching record levels in 2015 and 2016, Metro Vancouver home sales returned to more historically normal levels in 2017. Home listings, on the other hand, came in several thousand units below typical activity.

The Real Estate Board of Greater Vancouver (REBGV) reports that sales of detached, attached and apartment properties reached 35,993 on the Multiple Listing Service® (MLS®) in 2017, a 9.9 per cent decrease from the 39,943 sales recorded in 2016, and a 15 per cent decrease over the 42,326 residential sales in 2015.

Last year’s sales total was, however, 9.7 per cent above the 10-year sales average.

“It was a steady year for home sales across the region, led by condominium and townhome activity, and a quieter year for home listings,” Jill Oudil, REBGV president said. “Metro Vancouver home sales were the third highest we’ve seen in the past ten years while the home listings total was the second lowest on record for the same period.”

Home listings in Metro Vancouver reached 54,655 in 2017. This is a 5.1 per cent decrease compared to the 57,596 homes listed in 2016 and a 4.5 per cent decrease compared to the 57,249 homes listed in 2015.

Last year’s listings total was 4.4 per cent below the 10-year listings average.

“Market activity differed considerably this year based on property type,” Oudil said. “Competition was intense in the condominium and townhome markets, with multiple offer situations becoming commonplace. The detached home market operated in a more balanced state, giving home buyers more selection to choose from and more time to make decisions.”

The MLS® HPI composite benchmark price for all residential properties in Metro Vancouver ends the year at $1,050,300. This is up 15.9 per cent compared to December 2016.

The benchmark price of condominiums increased 25.9 per cent in the region last year. Townhomes increased 18.5 per cent and detached homes increased 7.9 per cent.

“Strong economic growth, low interest rates, declining unemployment, increasing wages and a growing population all helped boost home buyer demand in our region last year,” Oudil said.

December summary
Sales of detached, attached, and apartment properties totalled 2,016 in the region in December 2017, a 17.6 per cent increase from the 1,714 sales recorded in December 2016 and a 27.9 per cent decrease compared to November 2017 when 2,795 homes sold.

Last month’s sales were 7.5 per cent above the 10-year sales average for the month.

“As we move into 2018, REALTORS® are working with their clients to help them understand how changing interest rates and the federal government’s new mortgage qualifications could affect their purchasing power,” Oudil said. “Only time will tell what impact these rules will have on the market.

“Home buyers today should get pre-approved before making an offer to ensure that your home buying goals align with your financial situation,” Oudil said.

There were 1,891 residential homes newly listed for sale in December 2017. This represents a 44.1 per cent increase compared to the 1,312 homes listed in December 2016 and a 54 per cent decrease compared to November 2017 when 4,109 properties were listed.

The total number of homes currently listed for sale on the MLS® in Metro Vancouver is 6,958, a 9.7 per cent increase compared to December 2016 (6,345) and a 20.5 per cent decrease compared to November 2017 (8,747).

The sales-to-active listings ratio for December 2017 is 29 per cent. By property type, the ratio is 14.4 per cent for detached homes, 38.8 per cent for townhomes, and 59.6 per cent for condominiums.

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.

Sales of detached properties in December 2017 reached 617, a 14 per cent increase from the 541 detached sales recorded in December 2016. The benchmark price for a detached home in the region is $1,605,800. This represents a 7.9 per cent increase compared to December 2016.

Sales of apartment homes reached 1,028 in December 2017, a 12.3 per cent increase compared to the 915 sales in December 2016.The benchmark price of an apartment in the region is $655,400. This represents a 25.9 per cent increase compared to December 2016.

Attached (or townhome) property sales in December 2017 totalled 371, a 43.8 per cent increase compared to the 258 sales in December 2016. The benchmark price of an attached home in the region is $803,700. This represents an 18.5 per cent increase compared to December 2016.

Click here to download the full package.

Condominium sales drive August activity

Competition for condominiums and townhomes pushed Metro Vancouver* home sales above typical levels in August.

The Real Estate Board of Greater Vancouver (REBGV) reports that residential property sales in the region totalled 3,043 in August 2017, a 22.3 per cent increase from the 2,489 sales recorded in August 2016, and a 2.8 per cent increase compared to July 2017 when 2,960 homes sold.

Last month’s sales were 19.6 per cent above the 10-year August sales average.

“First-time home buyers have led a surge this summer in demand in our condominium and townhome markets,” Jill Oudil, REBGV president said. “Homes priced between $350,000 and $750,000 have been subject to intense competition and multiple offers across the region.”

There were 4,245 detached, attached and apartment properties newly listed for sale on the Multiple Listing Service® (MLS®) in Metro Vancouver in August 2017. This represents a 1.1 per cent decrease compared to the 4,293 homes listed in August 2016 and a 19.2 per cent decrease compared to July 2017 when 5,256 homes were listed.

The total number of properties currently listed for sale on the MLS® system in Metro Vancouver is 8,807, a 3.5 per cent increase compared to August 2016 (8,506) and a 4.2 per cent decrease compared to July 2017 (9,194).

For all property types, the sales-to-active listings ratio for August 2017 is 34.6 per cent. By property type, the ratio is 16.3 per cent for detached homes, 44.8 per cent for townhomes, and 76.3 per cent for condominiums.

Generally, analysts say that downward pressure on home prices occurs when the ratio dips below 12 per cent for a sustained period, while home prices often experience upward pressure when it surpasses 20 per cent over several months.

“Conditions in our detached home market are distinct today from the dynamic in our condominium and townhome markets,” Oudil said. “Detached homes have entered a balanced market. This means there’s less upward pressure on prices and that buyers have more selection to choose from and more time to make their decisions.”

The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $1,029,700. This represents a 9.4 per cent increase over August 2016 and a one per cent increase compared to July 2017.

Sales of detached properties in August 2017 reached 901, a 26 per cent increase from the 715 detached sales recorded in August 2016. The benchmark price for detached properties is $1,615,100. This represents a 2.2 per cent increase from August 2016 and a 0.2 per cent increase compared to July 2017.

Sales of apartment properties reached 1,613 in August 2017, a 20.1 per cent increase compared to the 1,343 sales in August 2016. The benchmark price of an apartment property is $626,800. This represents a 19.4 per cent increase from August 2016 and a 1.7 per cent increase compared to July 2017.

Attached property sales in August 2017 totalled 529, a 22.7 per cent increase compared to the 431 sales in August 2016. The benchmark price of an attached unit is $778,300. This represents a 12.8 per cent increase from August 2016 and a 1.9 per cent increase compared to July 2017.

Click here to download the full package.

Fifth Dimension Complimentary Report – Q2 2017

Despite somewhat uncertain times, 4,885 new multifamily homes were sold in the Second Quarter of 2017 making the mid-year total the second best since 2010. Sustained demand, along with another similar quarter of 3,000+ units sold is projected for the Third Quarter of 2017. Inventory levels remain an issue, and for the first time in the last few years, a sentiment of uncertainty is emerging in the industry largely related to the change in government. Despite this, prices are rapidly appreciating – as are absorptions. The multifamily development remains a “green light” rated opportunity in each and every market area within the Metro Vancouver.

We hope you find this comprehensive analysis of the Metropolitan Vancouver multifamily residential real estate market for the Second Quarter of 2017 informative and thought provoking. As always, feel free to share this report as widely as you see fit.

Download the Fifth Dimension here.

Fraser Valley home sales still strong despite summer slowdown

SURREY, BC – Sales activity remained strong in July, despite month-over-month decreases for each of the three major residential property types. This was the sixth strongest July historically for the Fraser Valley Real Estate Board.

The Fraser Valley Real Estate Board processed 1,937 sales of all property types on its Multiple Listing Service® (MLS®) in July, a decrease of 1.3 per cent compared to the 1,962 sales in July of last year, and a 24.7 per cent decrease compared to the 2,571 sales in June 2017.

Of the 1,937 sales processed last month, 447 were townhouses and 544 were apartments. This is the twelfth consecutive month attached sales have outpaced detached sales in the region.

“Even though activity has eased off for the summer we’re continuing to see the same trends we’ve seen all year. Namely, strong demand for attached-style homes and slight but steady increases in pricing,” said Gopal Sahota, Board President.

Last month the total active inventory for the Fraser Valley was 5,970 listings. Active inventory decreased by 0.7 per cent year-over-year, and increased 8.8 per cent when compared to June 2017.

The Board received 3,301 new listings in July, a 2.3 per cent increase from July 2016, and a 11 per cent decrease compared to June 2017’s 3,707 new listings.

“Thankfully we’re continuing to see greater amounts of inventory come on to the market, with homes that are priced effectively still selling fast and encountering multiple offer situations,” continued Sahota.

“If you’re looking to buy, you’ll be in the best position to do so if you know what you want and can make a decision quickly. Talk to a REALTOR® to help you get where you need to be.”

For the Fraser Valley region, the average number of days to sell a single family detached home in July 2017 was 24 days, compared to 18 days in July 2016.

HPI® Benchmark Price Activity

• Single Family Detached: At $966,000, the Benchmark price for a single family detached home in the Valley increased 3.4 per cent compared to June 2017, and increased 10.0 per cent compared to July 2016.

• Townhomes: At $485,900 the Benchmark price for a townhome in the Fraser Valley increased 4.0 per cent compared to June 2017, and increased 18.1 per cent compared to July 2016.

• Apartments: At $341,100, the Benchmark price for apartments/condos in the Fraser Valley increased 4.9 per cent compared to June 2017, and increased 33.3 per cent compared to July 2016.

Full package:
http://www.fvreb.bc.ca/statistics/Package201707.pdf