March started out with a bit of uncertainty in the market for detached homes although the market for attached properties had never been hotter accounting for over half of all sales in the Fraser Valley. Prices for condos and townhouses had been increasing since January. Multiple offers were again becoming the norm for certain attached properties. The big news item was that active listings in March were at the lowest level seen in the past 10 years and this was going to cause prices to increase across all property types.
By April, prices for detached homes and attached homes were on the rise. Inventory levels were at the lowest seen for an April in ten years. In many areas, the inventory of attached properties saw a turnover rate close to 100%.
Toronto introduced a 15% tax on purchases of real estate by foreign buyers in April. This has already caused a significant slow down in the Toronto market and could encourage foreign buyers to return to Vancouver.
May saw a much needed increase of new listings, however, it wasn’t enough. May marked the highest level of sales for the Fraser Valley since June of last year, and the second-highest level for a May on record with May 2016 having the highest. In May, we saw prices climb to record high levels. The average days on market for both detached and attached homes were less than 11 days, selling at 100% to 105% of list price. There remained one exception to this remarkable month and that was the detached market in South Surrey. Due to higher inventory levels, prices have remained stable throughout the spring with average days on market being 22.
The demand for condos and townhouses continues to drive the market. Pre-construction sales of new townhouses and condos are quickly selling out leaving close to zero units of new construction available when projects are completed.
SALE PRICES AT RECORD HIGHS:
Detached homes: Benchmark price in the Fraser Valley is now $915,800 an increase of 9.8% since May 2016.
Townhouses: Benchmark price, $458,900, has increased 25.7% since May 2016.
Condos: Benchmark price, $295,000, has increased a whopping 31% in the past 12 months.
WHAT THE EXPERTS SAY:
“Measures designed to cool the housing market and the issues surrounding mortgage lender Home Capital will not damage the Canadian housing market according to a poll of economists.
Low interest rates and strong demand will keep the market buoyant, analysts polled by Reuters suggests”
Reported by Canadian Real Estate Wealth
“Canada’s financial system remains resilient, and this resilience has increased because the Canadian economy has strengthened since December. Still, the two most important vulnerabilities for Canada’s financial system—the elevated level of household indebtedness and imbalances in the Canadian housing market—have moved higher over the past six months.” Bank of Canada Governor, S. Poloz
Clearly, if you are thinking of selling, now is a great time. Last June saw a big jump in inventory causing prices to fall.