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Vancouver Real Estate Has Split into Two Separate Markets

Vancouver Real Estate Has Split into Two Separate Markets

According to our Vancouver Condo Pros, there is a consensus that the real estate landscape in Vancouver has been divided into two separate markets; one for single-family detached houses and another for condos and townhouses. While these two arenas of real estate often experience different levels of activity, the division gap in Vancouver seems to be growing. The question is how are these separate markets performing and how do you navigate them?

Vancouver freehold market has slowed

Across Metro Vancouver, we have seen that the single-family detached home market is experiencing a slowdown since the summer months, and it’s even become a buyers’ market in some places. According to the Real Estate Board of Greater Vancouver (REBGV) September report , the benchmark price for a detached home was $1,617,300, and market activity was apparently balanced.

With a median household income in Vancouver of roughly $76,000, (Narcity ) the affordability rate for Vancouver’s benchmark 1.6 million-dollar home is 21 years. When we compiled our global condo affordability study back in October of 2016, Vancouver’s average affordability rate was 15 years. Things have changed, and a shift from the near-impossibly affordable freehold market into more affordable condos and townhouses is understandable.

The condo and townhouse market favours smaller spaces

It’s almost as if buyers are so put off by the huge mansion-type house with their monstrous price tags that they are turning to the complete opposite—entry level studios and one-bedroom suites. Either that or it’s all most buyers can afford. The benchmark price for a condo apartment in September was $635,800, according to REBGV.

The 2016 census revealed that Vancouver has a growing portion of one-person households. Whether that’s due to downsizing, divorce, or modern lifestyles is unclear, but affordability is certainly key. A single-resident has a smaller income than a dual-resident. In most areas of Vancouver’s Eastside, Westside, and Downtown Vancouver, studios and one-bedrooms are the hottest ticket item in real estate. So smaller condos in Vancouver are selling quickly and often in multiple offer situations.

The million-dollar luxury condo market, however, is selling less quickly, which makes sense. General real estate mobility, whether entry-point or new investment, is happening most within the studio and one-bedroom condo range.

3 ways to help navigate Vancouver’s divided real estate market(s)

1. Educate yourself. Keep watch on the Real Estate Board of Greater Vancouver’s website and read their monthly stat reports. Track the sales numbers and follow the trends they show. Talk to others about the numbers and figures and share your experiences so you have a better idea of what to expect.

2. Don’t stress out. We wrote an article in July about the impact that buyer and seller behaviour can have on real estate prices, and how personal stress contributed to Vancouver condos prices going up and up. It’s sounds like nonsense because we tend to think of real estate as being controlled by some mysterious market forces, but in many ways those forces are the everyday actions of buyers and sellers. So, try to relax.

3. Work with a professional (yes, the sales pitch). In all seriousness, though, real estate is a complicated business, and Canada is setting a prime example these days. Between the media fear-mongering and the new government interventions, it’s a confusing landscape in which an informed licensed professional can be your best guide. Whether you’re a first-time buyer, investor, downsizer, etc., talk to one of our Vancouver Condo Pros today to better understand the state and changes of Vancouver’s real estate market.