Vancouver condo

Bidding Wars Still Prevalent in Vancouver Condo Market

Steve Saretsky -

Amidst a slowing Vancouver Real Estate market which witnessed the detached segment register a twenty seven year low in sales for the month of March, the Vancouver condo market appears to be undergoing a cooling of it’s own. Vancouver condo sales trickled in at just 508 sales for the month, it’s lowest total since the year 2013. It was the second annual decline and a 43% decline from it’s peak in March 2016.

However, despite the obvious slowdown and decline in buying activity, multiple offers remain consistent. A total of 48% of Vancouver condo sales sold above the asking price in March, an 11% jump from the year prior.

Vancouver condo bidding wars
Percentage of Vancouver condos sold over asking price.

This is a result of listing inventory still stuck at crisis levels. Total inventory for sale sunk 16% on a year over year basis. It appears fewer buyers are chasing less supply, particularly at the entry level, where 58% of one bedroom units sold above the asking price.

Luckily for condo buyers, relief is on the way. Completions of new construction condos are ramping up. The twelve month rolling average of unit completions hit a record high in February of 23,623 units. Purchasers of these units, who are rarely end users, will be testing the re sale or rental market as they complete. This should provide some much needed relief to buyers and renters alike.

Vancouver residential unit completions
New unit completions in Vancouver. Twelve month rolling average.

A continued decline of condo sales combined with a record high completion rate should help to replenish inventory levels. Until then it remains slim pickings.

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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