As the Metro Vancouver real estate market continues to grow, so does the demand for condominiums.
A local real estate agency is calling 2022 “the year of condos,” after condos posted a sales-to-active listings ratio of 38.1 percent last month.
According to Faith Wilson | Christie’s International Real Estate apartments in Metro Vancouver were on the market for an average of just 16 days, with a listing price of $779,700.
CTV News spoke with a real estate agent about what prospective buyers and sellers need to know.
Ask: Why is 2022 called the year of condos?
Response from James Hau, Real Estate Advisor: Even as early as 2021, we are starting to see a major shift within the condo sector.
In early 2020, outside of the west side of downtown Vancouver, the condo market in the suburbs was relatively lackluster. But starting in 2021, we start to see a steady increase not only in absorption rates, but also in values. And from December 2021 to the end of May, we have seen a massive increase in price at a very fast pace.
We are talking from January 2020 to May 2022. There was a 25.17% increase in the value of the condo sector in Greater Vancouver. But what is more significant is the fact that from December 2021 to May this year there has been an increase of 11.14 percent. So, in such a short amount of time, you can see that values have gone up pretty quickly all over Greater Vancouver.
Ask: What trends are you seeing on the west side of downtown Vancouver that are different than other parts of Metro Vancouver?
Answer: The growth rate is quite different. The west side of downtown Vancouver was the first condo neighborhood in Greater Vancouver to really break into a very strong seller’s market.
So in terms of overall pricing, they really have passed a lot of their historical thresholds in terms of pricing. Inventory is also going up for that sector in that specific market. And now with interest rate increases, there are a lot of consumers who are really drifting towards alternative options and the suburbs are a great opportunity for them to find this.
Ask: Why are more buyers opting for condo living over single-family offerings?
Answer: Price definitely has something to do with it, for sure. We’ve really seen a trickle down effect for consumers in general now that interest rates have gone up.
Aside from the fact that on the west side of downtown Vancouver, condominiums are already more expensive. Now, with interest rates rising, people are looking for alternatives that make more sense to them. They could get a lot more product for the same price in Burnaby or Richmond. I think the general consumer sentiment is turning quite positive regarding condo spaces.
Due to what is happening in the financial markets, it is not as common to see offers without a theme as it was before February. At that point it is much easier to get cash deals for listings. But at this point, typically when we’re looking at, say, condos, we still see cash offers.
And that’s because there is a large population of baby boomers. In fact, that is the largest population that we have in Canada and they are looking to reduce their size. Many of these people have already sold perhaps a townhouse, duplex, or single-family home, which has increased significantly over the years, despite changes in recent months. And they’re looking to shrink down to something they can live with for the rest of their days.
So if it’s about competition, if it’s about having leverage, these types of buyers certainly have it. They have the money to get the perfect house for themselves. But also, interestingly, we’ve also seen a large number of former tenants who are moving into the condo space.
Ask: What trends have you seen emerging in the luxury real estate market?
Answer: Due to the price differences of what you get on the west side of downtown Vancouver, not just for townhomes or duplexes, but also for high-end condos, we’ve noticed that many consumers are really leaning towards the luxury condo sector. of Burnaby and Richmond.
We’re starting to see a lot of properties that are in the premium range within those respective cities really starting to hit new all-time highs and this is relatively recent, just within the last month or two, and it really hasn’t stopped. For the same price as what you’d get for an older townhouse, you could own a luxury condo in one of the best neighborhoods within Richmond and Burnaby. So those values are still rising right now.
Ask: What is the most important thing for buyers and sellers to consider right now?
Answer: I feel like something that’s crucial for consumers right now is to really start with a general understanding of broad market trends, but also hone in on a more granular level to the specific types of products and neighborhoods that are going to be relevant to you. .
Because at this point, we’re really in what we call a divergent market, which means that while you can generalize what’s going on in Greater Vancouver, if you go to specific price levels and specific neighborhoods, you’ll see that they have their own micro markets. Therefore, it is extremely important and imperative that you stay on top of trends in that space.