Vancouver Housing Market Report
- Vancouver's housing market is cooling despite three rate cuts (this year) and expectation of 4 more cuts over the next eight months.
- The average home price in Greater Vancouver was $1,249,890, which declined 2.8% annually and 2.4% monthly.
- In August 2024, the benchmark price of homes in Metro Vancouver was $1,195,900, representing a 0.2% monthly decrease and a 0.9% yearly decrease.
- Vancouver’s benchmark price has increased 74% over the past decade but is 5.1% lower than its all-time high of $1,259,900 in April 2022.
- Detached home average price decreased by 11% year-over-year to $2.09M.
- Attached home average price decreased by 1.2% year-over-year to $1.21M.
- Condo apartment average price increased by 4.6% year-over-year to $842k.
- September 18, 2024 Update: Today’s lowest mortgage rate in Vancouver is 4.29% for 5-Year Fixed.
Greater Vancouver Housing Market Overview
Average and Benchmark Home Prices
The average home price in Greater Vancouver was $1,249,890 in August 2024. This price represents an annual decrease of 2.8% and a monthly decrease of 2.4%. In August 2024, the average sale price of detached houses and attached houses in Greater Vancouver was $2,092,781, and $1,212,982, representing a 1.4%, and 1.8% decrease relative to July 2024, respectively. While apartments average price was $842,302 representing 2.9% monthly increase.
The benchmark price of homes in Metro Vancouver was $1,195,900 in August 2024, a 0.2% monthly decrease and a 0.9% decrease year-over-year. Benchmark prices of detached houses in Vancouver rose 1.8% over the past year but decreased 0.1% over the past month to reach $2,048,400 for August 2024. Vancouver’s attached home benchmark price is $1,119,300, up 0.8% year-over-year but down 0.5% month-over-month in August 2024. Apartment benchmark prices decreased 0.1% year-over-year to $768,200.
Vancouver Home Sales
In August 2024, 1,904 Vancouver houses were sold. These sales include 509 detached homes, 1,012 apartments and 370 attached homes. Looking at Metro Vancouver's housing market, there were 13,812 active listings at the end of August 2024, up 37% compared to last year but down 3.6% relative to the previous month. The number of active listings is much higher than the long-term average for this time of the year.
The 4,109 new listings this month represent a 4.2% increase year-over-year but 27% lower than last month. The 1,904 home sales this month are 17% lower year-over-year. These numbers put Vancouver’s sales-to-active listings ratio at 14%, showing a clear downward trend from 16% and 17% in July and June. Also, the sales-to-new listings ratio (SNLR) was 46% for August 2024. An SNLR above 60% is interpreted as a seller’s market, while an SNLR below 40% is a buyer’s market. In comparison, an SNLR between 40% and 60% is interpreted as a balanced market.
Vancouver Home Prices
Vancouver benchmark home prices have increased by 240% since January 2005. This translates into a cumulative annual growth rate (CAGR) of 6.4%.
Comparison Between Vancouver and Toronto Housing Markets
Metro Vancouver and the Greater Toronto Area are the most expensive Canadian housing markets. Vancouver has been a pricy housing market for many years, and its current benchmark price has increased by 35% over the past five years, compared with the CPI inflation of 18% over the past five years. This rise in home prices was supported by an increase in the population.
Greater Vancouver Population Chart
Toronto’s competition with Vancouver regarding home unaffordability is relatively recent, as Greater Toronto benchmark home prices have climbed by 42% over the past five years to reach $1,082,200 in August 2024. This five-year growth translates into an impressive CAGR of 7.2% (which does not include the potential rent received or the expenses paid). This 5-year growth is despite an 18% price decline from the peak of $1,313,800 in Toronto benchmark home prices in March 2022.
Long Term Trend
Over the past 19 years, the 216% growth in Vancouver home prices has been much faster than either the inflation rate of 50% or wage growth. In other words, building houses (producing shelter) has been more difficult than making most other goods and services. Many claim that land is a limited resource, and thus, house building faces a natural limitation. This is incorrect as there is no natural limitation on increasing the population density.
For example, the population density in the Vancouver metropolitan area is 920/km2, while the population density in the city-state of Singapore is 7,800/km2. So, land is not the limiting factor for sheltering people. What is limiting house building in Vancouver and Toronto area are municipal regulations imposed on housing production. This problem is quantified in the “Municipal Land Use and Regulation Survey.”
In a very belated but necessary decision, the Vancouver City Council allowed building multiplexes of up to 6 strata units or up to 8 rental units on larger lots formerly limited to single-family houses. More importantly, the BC government has passed legislation forcing municipalities to allow (at least) a secondary suit on each lot. In municipalities with more than 5,000 people, a minimum of 3 or 4 (depending on the lot size) units per lot will be permitted. Toronto has also moved to allow the building of plexes on most residential land parcels. Given the racist root of zoning regulation, these changes are coming too late.
Such rezoning steps can increase the supply of dwellings and prevent further inflation of the Vancouver housing market bubble. Such moves in time should allow Vancouver home prices to decline in real (inflation-adjusted) terms. This decision should also cause single-family detached home prices to increase in relation to attached and apartment units, as from now on, most single-family homes have the potential to host few homes on their land.
Macroeconomics Analysis
Over the past three years, monetary policy has been a primary driver of Canadian housing markets. Housing markets were booming during the pandemic as the monetary base expanded faster than ever. During the second half of 2022, the Bank of Canada's restrictive monetary policy put a break on the housing market activity by increasing interest rates in Canada. During 2022 and 2023, the Bank of Canada raised interest rates to subdue CPI inflation.
On the one hand, higher interest rates reduce the present value of the rent, which can be earned from a home, thus reducing the house's value. On the other hand, higher interest rates mean higher Canadian mortgage rates, which result in higher mortgage payments and reduce home affordability. Therefore, the average Canadian home price peaked in February 2022 and decreased 25% into the January 2023 trough.
In January 2023, BoC paused its rate hikes, and the market started looking forward to rate cuts. The seasonal effect of spring and expectations for decreasing mortgage rates fueled a 2023 resurgence in the housing market. Canada’s average house prices rose 19% from its January low by May 2023. In June and July 2023, BoC raised rates again. As a result, Canada's housing markets softened again, and prices declined from May 2023 until November 2023. Between November 2023 and April 2024, the market eagerly anticipated rate cuts by the BoC. Average Canadian home prices were once again trended higher from November 2023 until April 2024. Now, in the second half of 2024, BoC is cutting rates and is expected to continue cutting over the next year. More recently, monetary policy has lost its prominent role in determining the direction of Canada’s housing market.
Over the past two decades, municipalities have been keeping the supply of houses down, and a firm belief has been created that southern Ontario and BC home prices can only go up. Investors were borrowing as much as they could to purchase more houses. This has been happening even though legislatures in Ontario and British Columbia have mostly sacrificed landlord property rights to create security of tenure for tenants. This belief in perpetual home price appreciation gave mortgage rates a prominent role in determining the direction of the Canadian housing market. However, the fluctuations over the past 2 years might start to break the belief that house prices can only go up. Home buyers might become more disciplined about how much they are willing to borrow, which might reduce the importance of monetary policy in the housing market.
Though monetary policy affects all of Canada, it is essential to remember that housing markets are local phenomena. The Ontario housing market and the British Columbia Housing market mainly influence the average Canadian home price. These two markets became bubble territory when expansionary monetary policy offered almost free money to real estate investors and speculators after the global financial crises, especially during the pandemic.
BoC started cutting rates in June 2024, and the forecast for Canada mortgage rates is that they will decline from their current levels. Also, the 2024 mortgage rate forecast and the 2025 mortgage rate forecast show a prolonged decline in rates. This decline would not inflate already high home prices in southern Ontario or southern BC, as those price levels are unsustainable even at much lower interest rates.
Home Prices in Vancouver
Metro Vancouver Housing Market Statistics for All Property Types
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 Attached Homes in Metro Vancouver
Average Sold Price & Benchmark Price
Transactions
Market Overview for Condo Apartments in Metro Vancouver
Average Sold Price & Benchmark Price
Transactions
Greater Vancouver Area Breakdown by Region for August 2024
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.
Disclaimer:
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- Interest rates are sourced from financial institutions' websites or provided to us directly. Real estate data is sourced from the Canadian Real Estate Association (CREA) and regional boards' websites and documents.
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