The Real Estate Board of Greater Vancouver (REBGV) says they are waiting to watch what will happen next in Vancouver’s real estate industry as home buying demand slowed to normal levels in July.
“After several months of record-breaking sales activity, home buyer demand returned to more historically normal levels in July,” Dan Morrison, REBGV president said in a release.
The number of sales in Metro Vancouver totaled 3,226 last month, down 18.9 per cent from one year earlier and 26.7 per cent from June. The number of sales of single family homes saw the largest decrease, down 30.9 per cent from the year before.
This is the first time home sales in a month have counted below 4,000 since January.
Meanwhile, new inventory increased year-over-year by 2.5 per cent. The sales-to-listings ratio was 38.6 per cent, the lowest for a July since at least 2013.
Prices continue to increase slightly
But prices continued to increase, with the benchmark price of a detached home now marked at $1,578,300, up 1.1 per cent from the month before and 38 per cent from July 2015.
Prices for these properties actually decreased in certain neighbourhoods, including Burnaby North (-1.7 per cent), Ladner (-0.9 per cent), and Tsawwassen (-0.2 per cent).
Apartment prices also increased again, up to $510,600 compared to $501,100 in June and $400,900 in July 2015, an increase of 1.9 per cent and 27.4 per cent respectively. Sales of these properties decreased by 7.3 per cent year over year.
Townhomes were up to a benchmark price of $669,000, a 1.8 per cent jump from the month before and 29.4 per cent year over year. Sales of these properties decreased by 20.7 per cent year over year.
“Home sale activity showed some moderating signs in late June and this carried into July,” Morrison said. “We’ll wait and watch over the next few months to see if this marks the return of more normal market trends.”
Sales-to-active listings ratio is the red herring
Last month, UBC’s Tom Davidoff, an associate professor at the Sauder School of Business and a real estate analyst, said the first signs of a bubble bursting might be sales volume slowing down and inventory rising.
June saw the lowest sales-to-active listings ratio for detached homes for the month, at 59 per cent, since the beginning of Vancouver’s spike in home prices in 2013. July’s ratio of 45 per cent is also the lowest for the month, down from 77 per cent this time last year.
The sales-to-active listings ratio is a key indicator of the health of the market. In layman’s terms, it is the supply and demand of properties. The lower the number, the better the market is for buyers.
Summer months are typically slower for real estate transactions than the busy spring and fall periods, but the data shows a departure from the repeatedly scorching hot statistics reported by REBGV each month for the last several years.