Any doubts that Canadian real estate is cooler than last year was just confirmed. The latest stats from the BC Real Estate Association (BCREA) show significant declines in the real estate crazed province. BCREA numbers show the province is still seeing higher prices, but huge drops in both sales and dollar volume.
Average Sale Price Increased 4.2%
Real estate prices are moving higher across BC, just not as fast as locals are probably used to seeing. The average residential sale price was $752,536 in May, a 4.2% increase from the same month last year. Greater Vancouver had the highest average prices at $1,110,376, a 5.2% increase from May 2016. Victoria saw the largest jump in average sale price at $674,237, a 15.1% increase from the same time last year. All districts but Northern Lights saw the average sale price increase.
Source: BCREA.
Dollar Volume of Sales Showed A 4% Decline
Last month showed a significant decline in total dollar volume across the province. Residential sales totalled $9.33 billion, a 4% decline from the same month last year. There were 12,402 sales, a decline of 7.9%. It’s safe to say that the decline in sales had a direct impact on the total dollar volume dropping.
Year To Date This Adds Up To $10 Billion Less Than Last Year
The drop in sales have been adding up to a massive decline when looked at year to date. From January to the end of May in 2017, there were 43,158 sales. This is a 20.7% decline when compared to the same period last year. The total dollar volume of residential sales in the first five months of 2017 added up to $30.62 billion, a 25.2% decline from last year. The numbers are still huge for a province with less than 5 million people, but the $10 billion decline in sales volume is nothing to sneeze at.
Source: BCREA.
The monthly decline of just 4% doesn’t seem like much, but when 2017 is looked at as a whole it reveals a much cooler market. If dollar volumes continue to decline, expect prices to follow.
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As long as developers keep building for the high end of the market, the average wage earner won’t have a chance.
That’s the trope but I’m not so sure it’s true. If you build lots of new luxury condos, it should decrease the value of older and non-luxury condos, as buyers with money will be buying the new units instead of bidding up the price of existing units.
Actually, I think what will happen is that the people in the older stratas will get together and entertain offers from developers to tear down their complexes and start again. That might seem radical, until you see the ravages that fifty years of rain and neglect (or a bare minimum of maintenance) has on a building. It COULD be a win/win if developers can get increased density; on the other hand if your place has been paid off for years and you’re happy with your unit, it could be a major pain in the ass to unload and then find another, comparable place.
Total dollar volume is down, bcause sales are down, because people are afraid to sell, because there are few listings, so nohing to buy, because people are afraid to sell. So total dollar volume is down…..whoops. Its really not that complicated, and really not that scary.
A question for the blogger: are you a homeowner?
Detached inventory has been slowly building so sellers apparently aren’t afraid enough. In the condo market, you might be on to something; sellers could be waiting for a correction in detached prices before they upgrade.