Demand for Vancouver Detached Homes Continues to Shrink

Steve Saretsky -

Condos Continue to Increase Their Market Share of Total Sales; Detached Shrinking

Over the past few months i’ve continuously highlighted the growing trend for buyers choosing condos over single family homes. The desire for Vancouver condos continues to grossly outpace single family homes, for obvious reasons, affordability.

With foreign buying activity dwindling, in large part thanks to China’s capital controls which are halting overseas real estate investment, the market for Vancouver detached homes has been shrinking. (Single family home sales above $3 Million have plunged 27% )

Single family homes as a percentage of total market sales dropped to 22.8% in July, 2017. In simpler terms, for every 100 sales in Vancouver, roughly 23 are detached homes. This number has been steadily dropping since it peaked in January 2016 at 34.8%.

detached home sales mix
Detached home sales as a percentage of total sales mix continues to fall.

With the detached housing market peaking in early 2016, for various reasons, the sales mix began to shift towards condos. The share of sales for Vancouver condos increased from 59.1% in January 2016 to 68.2% in July, 2017.

Vancouver condo sales mix
Demand for Condos continues to grow relative to total Vancouver sales.

I expect this trend to continue as the PBOC remains serious about controlling capital outflows.  With the average single family home out of reach for the majority of locals, prices appear to be inching downwards, and as of July, 2017 have dropped 5% year over year.

Vancouver Detached home prices
Six month rolling average for Vancouver Detached home prices peaked in August, 2016.

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The Canadian Economy

Steve Saretsky -

Happy Monday Morning! We got a string of new data this past week confirming inflation in consumer goods, and housing are proving to be more than transitory. Canada’s consumer price index continued to drift higher with prices hitting an 18 year high, up 4.7% from last October. The recent floods in BC...

Steve Saretsky -

The calls for impending interest rate hikes continues. CIBC’s chief economist, Benjamin Tal, was out recently suggesting the Bank of Canada could hike its benchmark interest rate at least six times beginning in early 2022. “I think there is a risk of getting into the market at today’s rates,” noted Tal....

Steve Saretsky -

The BC Government announced it is looking at several cooling measures for the housing market in 2022. They have highlighted two measures. The first is an end to the blind bidding process, and the other is a mandatory “cooling off period” which will allow any buyer a 7 day recession...

Steve Saretsky -

The Bank of Canada continues to slowly drain liquidity after flooding the system with a firehose of cash during the pandemic. Bank of Canada governor Tiff Macklem announced the end of Canada’s QE program (also known as money printing). Furthermore, in Macklems words, “We expect to begin increasing our policy...

Steve Saretsky -

Consumer price inflation ripped higher in September, surging 4.4% year-over-year, the fastest pace of price increases in 18 years. Let’s discuss this further. We have an inflation problem and the Bank of Canada remains of the view that inflation will be transitory. Although they really can’t say otherwise, for if...

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The Saretsky Report. December 2022