Metro Vancouver and Fraser Valley home sales rebounded in May compared to April, but continue to be depressed significantly compared to normal market conditions. Meanwhile, prices have remained stable, according to newly released market statistics.
All eyes are on the Canadian housing market during the COVID-19 pandemic response, as 8.33 million Canadians have applied for the Canada Emergency Response Benefit due to loss of employment, according to June 1 government figures. Meanwhile, the Canadian Mortgage and Housing Corp. (CMHC), which insures mortgages with backing from the public purse, reports an estimated 12% of mortgages are in deferral and that figure could leap to 20% by September. CMHC is also forecasting a 9% to 18% dip in housing prices within 12 months.
Canada has a household debt to GDP ratio of 102%, making it the fifth worst among advanced and emerging economies, CMHC notes.
A crash in real estate prices would further submerge indebted homeowners who depend on their home equity for balancing their finances.
But May’s prices held steady.
“Home prices have been stable during the COVID-19 period,” said Colette Gerber, chairwoman of the Real Estate Board of Greater Vancouver (REBGV).
REBGV reports residential home sales in the region totalled 1,485 in May 2020, a 43.7% decrease from the 2,638 sales recorded in May 2019 and a 33.9% increase from the 1,109 homes sold in April 2020. Last month’s sales were 54.4% below the 10-year May sales average.
However, the benchmark price for all residential properties in Metro Vancouver today is $1,028,400. “This is virtually unchanged from April 2020, a 1.4% increase over the last three months, and a 2.9% increase compared to May 2019,” noted the board.
People have pulled their homes from the market, too.
“The total number of homes currently listed for sale on the MLS [multiple listing service] system in Metro Vancouver is 9,927, a 32.4% decrease compared to May 2019 (14,685) and a 5.7% increase compared to April 2020 (9,389),” noted the board.
The Fraser Valley, from Surrey east to Chilliwack, shows similar trends, according to the Fraser Valley Real Estate Board (FVREB).
The Fraser Valley Board reports it has received 2,207 new listings in May, a 56% increase compared to April’s intake of 1,416 new listings and a 38% decrease compared to May of last year. May finished with 6,454 active listings, an increase of 8% compared to April’s inventory and a decrease of 24% year‐over‐year.
“It’s important for buyers to note that prices overall remain stable,” said Chris Shields, FVREB president. “We’re not seeing a lot of downward pressure on prices because for many areas there is a shortage of inventory. We’re even seeing multiple offer situations currently where buyers are paying asking price. When supply and demand stay in balance, prices remain relatively firm.”
The average price of a home was up 2.7% this May compared to last May, but down 2.1% compared to April.
Over the last five years prices have risen 56.3% in Metro Vancouver and 75.4% in he Fraser Valley.