Greater Vancouver’s housing sector is edging closer to becoming a seller’s market.
A measurement closely watched by the real estate industry, known as the sales-to-active-listings ratio, hit 19.7 per cent in Greater Vancouver last month – the highest since June, 2011. The ratio was 15.7 per cent in April, 2013.
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B.C. real estate agents consider it a balanced market when the ratio ranges from 15 per cent to 20 per cent. It is deemed a buyer’s market below 15 per cent and a seller’s market above 20 per cent in the Vancouver area.
The Real Estate Board of Greater Vancouver reported Friday that residential housing sales climbed to 3,050 in April, up 16.1 per cent from 2,627 resale properties that changed hands a year earlier.
The benchmark home index price rose 3.6 per cent year-over-year to $619,000 in April for single family-detached homes, condos and townhouses that sold on the Multiple Listing Service.
There were a total of 15,515 active listings last month, down 7.3 per cent from a year earlier.
For existing single-family detached homes that sold on the MLS in April, the index price jumped 6.6 per cent year-over-year to $2,201,600 on Vancouver’s West Side, while rising 8.8 per cent to $901,200 on the East Side.
While activity has been picking up, sales in April were 5.2 per cent below the 10-year average for the month, board president Ray Harris said.
Developers are watching the property data closely.
Will Lin, president of Rize Alliance Properties Ltd., said the buzz about offshore buyers engaging in speculation has subsided for good reason.
“Contrary to what some developers like to believe, it is difficult to get offshore buyers to purchase Vancouver real estate when there is no real linkage for these buyers to Vancouver. They are buying for a good reason, occupying it for themselves or use it as a vacation home or have relatives that are going to come here and using it,” Mr. Lin said in a recent interview.
He added that given the high prices in the region, it is difficult for speculators to make fast money.
“This market is not conducive to that kind of quick flipping. Every real estate transaction has certain costs like legal fees,” Mr. Lin said. Then there is British Columbia’s property transfer tax. Using the home index price for Vancouver’s West Side of $2,201,600, a purchaser who pays that amount for the house would have to fork over $42,032 alone in the property transfer tax. If that purchaser later sells, there is the real estate commission to pay, not to mention various fees related to selling.
“A quick flip within a year or two is not going to let you make too much money,” Mr. Lin said.
In the Fraser Valley, there were 1,470 sales in April, up 7.6 per cent from 1,366 in the same month of 2013.
The overall April benchmark index price in the Fraser Valley, which includes the sprawling and less-expensive Vancouver suburb of Surrey, climbed 1.5 per cent to $433,100 for residential properties.