The amount of residential construction in Metro Vancouver remained high, but wavered little between 2021 and 2022, according to new data from the Canada Mortgage and Housing Corporation.
In a housing supply report published Wednesday, the Crown corporation said work on 25,983 new units began last year, down 30 units from the 26,013 recorded in 2021.
Overall, Metro Vancouver saw the second-highest number of housing starts among Canada’s metropolitan areas in 2022, eclipsed only by Toronto, which saw 45,109 new units. Rental apartment construction in the Vancouver area offset a “significant drop” in condo apartment construction, according to the CMHC.
In its own spring update, the Real Estate Board of Greater Vancouver has said 8,178 properties – detached homes, townhouses and apartments – were listed for sale in the region last month. That’s up from 7,628 in March of 2022.
The average number of days on the market for a detached home in Metro Vancouver last month was 39, an increase of 17 days from the same time last year. Benchmark prices, however, decreased in March 2023 from a little over $2.1 million to $1.8 million.
Home sales fell 42.5 per cent in March from a year ago and were 28.4 per cent below the 10-year seasonal average.
Nevertheless, realtors in Vancouver have told Global News that the seller’s market appears to have returned, citing an ongoing shortage in supply.
Christina Joe of RE/MAX City Realty said she recently had 70 groups visit an open house over three days and 10 of 11 offers made on the home met or exceeded the asking price. Five of those offers came without conditions.
In December, she added, she sold a home for less than the asking price with just three offers made in total.
“There aren’t enough homes for sale,” Joe said Wednesday. “I’d say things starting picking up in January … I think buyers were on the sidelines for a little while, then realized it was starting to get busy again, so they’re more comfortable dipping their feet in the market.”
Last week, the Bank of Canada held its benchmark interest rate at 4.5 per cent in a second consecutive decision, a move largely in line with economists’ expectations.
Realtor Ollie Nietzel said talk of cooling off interest rates in January gave a little kick to what had been a bit of a sluggish market, and the Bank of Canada’s recent holding pattern has peaked the pent-up interest of buyers.
“When interest rates started to go up, there was a lot of buyer activity at that time and the market was hot,” he explained. “All those buyers, they took a step back and started watching from the sidelines, and rightfully so — they wanted to see how they were going to be affected.
“Now that they have they have announced that they’re not going to increase interest rates, because they’re getting inflation under control somewhat, these buyers are starting to come back to the table again.”
Like Joe, he said he, too, is beginning to see more condition-free offers over asking price.
Earlier this month, the province announced a four-pillar plan aimed at cracking down on soaring real estate prices, increasing construction and creating more rental units.
Highlights of the ‘Homes for People’ project include a promise of legislation that allows up to four units on a single traditional housing lot, a tax on the proceeds of housing-flipping, and a forgivable loan of 50 per cent of the cost of basement suite renovations, up to a maximum of $40,000 over five years, if the secondary suites are rented at below-market rate for at least five years.
That pilot is expected to open next year to at least 3,000 homeowners for the first three years. The overall plan is expected to cost $4 billion in the first three years and $12 billion over a decade.
Tom Davidoff, a director at the University of British Columbia’s Centre for Urban Economics and Real Estate, said it appears the province is starting to get “fairly serious” about zoning, but nothing currently on the table will dramatically impact affordability in the city for buyers or renters.
“I think the real efforts have been to make sure that real estate is occupied by locals,” he told Global News, citing speculation and vacancy taxes.
Inflation and interest rates, he added, can work both ways to cool off, or heat up a housing market, but what seems to matter most consistently is supply.
“High interest rates are caused by inflation and that makes people not want to buy, but on the other hand when you have wages escalating, that does encourage people to buy,” he said.
“Suppose we get into recession, bad for pricing, but interest rates get cut — good for pricing — then maybe we stay about where we are. If the economy stays strong, but inflation disappears and we get a reduction in interest rates close to where they’ve been in the last 10 or 20 years, then I think we see a real jump in prices.”