Vancouver Housing Market Report
- Shortage of new listings, in combination with an expectation of falling mortgage rates, continues to push prices higher.
- The average home price in Greater Vancouver was $1,311,090, which rose by 2.4% annually and increased by 1.2% monthly.
- The benchmark price of homes in Metro Vancouver is $1,188,000, representing a 1.5% monthly increase and a 5.5% yearly decrease in May 2023.
- Vancouver’s benchmark price exhibits a 27% increase over three years but is 6.1% lower than the all-time high of $1,264,700 in May 2022.
- Detached home average price decreased by 4.2% year-over-year to $2.16M.
- Townhouse average price increased by 2.5% year-over-year to $1.24M.
- Condo apartment average price increased by 1.1% year-over-year to $823k.
Greater Vancouver Housing Market Overview
In May 2023, 3,411 Vancouver houses were sold. These sales include 1,043 detached homes, 1,730 apartments and 608 attached homes. The average home price in Greater Vancouver was $1,311,090. This price represents an annual increase of 2.4% and a monthly increase of 1.2%.
In May 2023, the average sale price of detached houses, attached houses and apartments in Greater Vancouver was $2,163,080, $1,238,219 and $823,044, representing -1.9%, 2.1% and 2.4% change relative to April 2023, respectively. These prices also represent annual changes of -4.2%, 2.5%, and 1.1%.
The benchmark price of homes in Metro Vancouver was $1,188,000 in May 2023, a 1.5% monthly increase and a 5.5% decrease year-over-year. Metro Vancouver and the Toronto area are the most expensive Canadian housing markets.
Vancouver has been a pricy housing market for years, and its current benchmark price has increased by 15% over the past five years, while CPI inflation has been 17% over the past five years. Toronto’s competition with Vancouver regarding home unaffordability is relatively recent, as Greater Toronto benchmark home prices have climbed by 52% over the past five years to reach $1,196,101 in May 2023. This five-year growth translates into a CAGR of 9.1%. This whopping 5-year growth is despite a 10.4% price decline since the peak in Toronto home prices in March 2022.
Benchmark prices of detached homes in Vancouver fell 6.7% over the past year but rose 1.8% over the past month to reach $1,953,600 for May 2023. Over the past three years, Vancouver detached homes' benchmark price has increased by $453k. This three-year price gain can buy an above-average home in the Edmonton area.
Vancouver’s attached home benchmark price is $1,083,000, down 4.7% year-over-year but up 0.2% month-over-month in May 2023. Apartment benchmark prices decreased 2% year-over-year and increased 1.1% month-over-month to $760,800.
Please note that Canadian Real Estate Association (CREA) has updated its benchmark definition in May 2023. As a result benchmark prices reported (recorded) over the past months and benchmark prices after May 2023 relate to slightly different houses.
Looking at Metro Vancouver's housing market, there were 9,293 active listings at the end of May 2023, down 10.5% compared to last year and up 5.7% compared with 8,790 listings at the end of April 2023. The number of active listings is significantly (20%) below the long-term average for this time of the year.
The 5,661 new listings this month is a 12% decrease year-over-year but a 31% increase compared with April 2023. The number of new listings is also below the long-term average for this time of the year. The 3,411 home sales this month are 16% higher year-over-year. This puts Vancouver’s sales-to-active listings ratio at 37%.
Over the past year, interest rate expectations were the main driver of the Canadian housing markets. During the past 15 months, the Bank of Canada has raised interest rates to subdue CPI inflation. Over this time, higher Canadian interest rates pushed up mortgage rates and reduced borrowing power, preventing bids from investors and speculators. As a result, average Vancouver home prices dropped by 13% from their February 2022 peak to their January 2023 trough.
In January 2023, the Bank of Canada (BoC) announced a pause in raising the Bank of Canada’s policy rate, and the market started to look forward to lower mortgage rates. A combination of expectations for lower interest rates with the seasonal effect of the spring resulted in a resurgent housing market over the past four months.
Looking at inflation over the past nine months, we observe that prices for services are rising at an annualized rate of 3.5%, while goods prices are rising at an annualized rate of 2.3%. Since July 2022, the aggregate consumer price index has risen at an annualized rate of 2.9%.
Over the past few months, the market expected mortgage rates to decline fast in the second half of 2023 and in 2024. This expectation was priced into fixed-income yields. It also once again invited speculators to housing markets and produced significant price gains in different housing markets around the country.
But since May 10 (partially due to the April inflation data), Canada’s 5-year yield and Canada’s 10-year yield have both significantly climbed. As a result, fixed mortgage rates have climbed, and expectations for a decline in variable rates are postponed. Over the coming months, we will see how housing markets respond to this development.
The provincial government of British Columbia has started a very interesting experiment. The Property Law Amendment Act and the Home Buyer Rescission Period Regulation have been enacted. When for example, buying a home in Ontario or buying a home in Alberta, the moment a house seller accepts a buyer's offer or the buyer accepts a seller's counteroffer, we have a legally binding contract. But as a result of these two changes, when buying a house in British Columbia, the buyer can cancel the sale by paying a quarter of a percent of the purchase price to the seller up to three days after the sale.
The idea behind this new law seems to allow the buyer to perform a home inspection and ensure their ability to finance the purchase even if they have not conditioned their offer on inspection or financing. But this might have much more profound implications for the British Columbia housing market.
One thing frequently occurs during asset bubbles is people getting excited about entering the market. As a result of this excitement, they are very likely to decide their offer price based on emotion. With a cooling-off period, the buyer can rethink their offer after the purchase when the excitement of getting into the market has likely passed.
Overpaying buyers would more likely face buyer’s remorse and cancel their purchase. Though limitation on supply (often imposed by municipal by-laws) might cause rises in prices, this new law has the potential to make a house price bubble inflation less likely.
Home Prices in Vancouver
Vancouver Housing Market Statistics for All Property Types in Metro Vancouver
Average Sold Price and Benchmark Price
Total Transactions
Property Type Distribution
Market Overview for Detached Homes in Metro Vancouver
Average Sold Price & Benchmark Price
Transactions
Market Overview for Townhouses in Metro Vancouver
Average Sold Price & Benchmark Price
Transactions
Market Overview for Condo Apartments in Metro Vancouver
Average Sold Price & Benchmark Price
Transactions
Regulation of Strata Insurance
Condo owners in Vancouver and B.C. have recently faced significant increases in their their strata insurance rates. According to a 2019 report commissioned by the B.C. Financial Services Authority, strata insurance premiums in B.C. increased by on average 40% in 2019 alone. Owners in Metro Vancouver faced even greater increases with an average increase of 50%. These costs have placed a headwind to condo prices in Vancouver as condo fees adjust to the new costs.
In response to the financial hardships caused by strata insurance premiums and COVID-19, the B.C. Ministry of Finance recently announced an amendment that, along with a proposed bill, will:
- End referral fees between insurers or insurance brokers and strata property managers or other third parties
- Require strata corporations to inform owners about insurance coverage, policy changes, and allow use of the contingency reserve fund
- Protect strata unit owners against large lawsuits where the owner was not at fault
- Change the minimum required contributions made by strata unit owners and developers to a strata corporation's contingency reserve fund
These changes will help condo owners deal with the financial burden of strata insurance and open the industry to more transparency.
What is Strata Insurance?Greater Vancouver Area Breakdown by Region for May 2023
Glossary and Definitions
MLS® HPI: The MLS® Home Price Index (HPI) is an index by the Canadian Real Estate Association (CREA) that tracks the prices of homes in a neighborhood. It allows Canadians to quickly compare home prices across Canada and between periods of time without having to account for specific features of a property. Unlike market prices, which can fluctuate from month to month based on seasonal dynamics, the HPI provides a stable view tracks trends across a longer period of time. The HPI is reviewed every year in May to adjust for changes in the real estate marketplace.
MLS® HPI Benchmark Price: The MLS® Home Price Index (HPI) Benchmark Price is the HPI translated into a real-world price number.
Strata Insurance: Strata insurance is insurance used by a strata like a condominium to covers damages to common areas and assets and liability to the strata. It can also include fixtures built or installed as part of the original construction of each unit, even though these may not be common structures. The insurance can cover:
- Buildings and structures associated with the strata including common areas such as the roof, parking garages, driveways, gyms, pools, etc.
- Liability for any property damage or bodily injury suffered on strata property
- Any fixtures that are part of the "standard unit" or original construction of each unit
Strata insurance does not usually include personal items and appliances that are part of a condo unit. It also does not cover the damages made by individual unit owners, such as in the case of water damage caused by a unit owner. These are usually covered by personal condo insurance.
Property types
Detached home: A detached home is your standard single-family home. It is a residential building that stands alone and is separately titled or legally a single unit.
Semi-detached home: A semi-detached home is similar to a detached home, except it shares a wall with another home. This pair of homes must make up an independent building and each should be separately titled or legally two separate units. There can only be two homes in a semi-detached building.
Townhouses: A townhouse is the middle between a detached/semi-detached home and a condo apartment. Like detached and semi-detached homes, they are often single-family units that have their own land and may be attached to other units. However, like condo apartments, they typically have to pay co-ownership fees for maintenance and may share some common features with their neighbors.
Condo apartment: This category includes all apartments and condominiums. These are complexes of residential units with common areas such as hallways, parking lots, stairwells, etc. They can be low-rise, mid-rise, or high-rise buildings. Unlike townhouses, there are no parts of the lot (the land of the building) where access is reserved for only one owner or occupant. There can be privately owned units and spaces inside the building.
Plexes are multi-story buildings with two to four individual units, usually one on each floor. They are a mainstay in Montreal and other cities in Quebec. Each unit is usually individually accessible via an external entrance with higher floors connected by staircases.
Property Classes
Freeholds: A freehold is any property where the owner owns both the house and the land it is built on. Common freehold property types include: detached, semi-detached, some townhouses, and farmland.
Condominiums: A condominium or condo is any property where the owner owns the home (or unit) but shares ownership of the land and other improvements with a condominium corporation. Common condominium property types include condo apartments and some townhouses.
Leasehold: Leasehold describes the situation where different entities own the land and the structure built on the land. Owner of the buildings has leased the land and pay rent to their landlord while owning the building on the land.
Housing Markets Across Canada
Data sourced from the Real Estate Board of Greater Vancouver (REBGV) and the Canadian Real Estate Association (CREA). Any analysis or commentary is the opinion of the analysts at WOWA.ca and should not be construed as investment advice. Please consult a licensed real estate professional before making a real estate investment decision. The trademarks MLS®, Multiple Listing Service® and the associated logos are owned by The Canadian Real Estate Association (CREA) and identify the quality of services provided by real estate professionals who are members of CREA.