Where to buy real estate in 2019: Greater Vancouver
For the first time in years, this area is seeing a reduction in home prices, particularly for property in the upper price brackets.
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Last year was very taxing for homeowners on the Lower Mainland. Quite literally. Homeowners in Greater Vancouver faced a number of new taxes and regulations introduced in an effort to curb the astronomically hot real estate market that has dominated this part of the country for the better part of a decade.
As frustrating, confusing and expensive as these new regulations may have been, they seem to have done the job. As of April 2019, the Canadian Real Estate Association reported decreased demand for all housing stock across Greater Vancouver (an area known as “Metro” Vancouver that encompasses Whistler, Sunshine Coast, Squamish, West Vancouver, North Vancouver, Vancouver, Burnaby, New Westminster, Richmond, Port Moody, Port Coquitlam, Coquitlam, Pitt Meadows, Maple Ridge and South Delta).
And it’s not just a small downturn in demand. March saw only about half the usual number of sales transactions compared with the 10-year average.
As you can imagine, that reduction in sales activity has meant an increase in housing inventory and, for the first time in years, a reduction in prices, particularly for property in the upper price brackets.
While real estate boards continue to blame government policy for the rapid decline in sales activity—in particular, the mortgage stress test—another big factor is the number of buyers that have disappeared due to taxes and regulations targeted at speculators, foreign buyers and money launderers.
But not all property types are equally impacted by these regulatory changes. Turns out the most expensive property type—the single-family home—is taking the brunt of the activity decline. In April, the overall sales-to-active-listings ratio was 9.4% for detached homes, 15.4% for townhomes, and 15.3% for condos. According to analysts, prices start to come down when this ratio dips below 12% and remains in that state for a sustained period of time. (Conversely, prices rise when this ratio sits at 20% or greater for a sustained period of time.)
For buyers still interested in getting into the property market in B.C., these statistics can either look very appealing—jump in now when the market is correcting—or really, really scary, as in “oh my goodness, the market is on the verge of collapse!”
The great thing is either answer can be right—for you. As long as you do your research, buying a home now can be a good decision, regardless of where we are in the market cycle.
That’s where MoneySense comes in. We analyzed Greater Vancouver and Fraser Valley real estate trends over the last five years, examining which neighbourhoods offer value—typically areas that are, on average, priced cheaper than neighbouring communities but with similar access to the same amenities. We examined what neighbourhoods have momentum—a prolonged history of rising property prices, because no one wants to buy into a community that appreciated quickly due to unrealistic near-term speculation.
Finally, we went to the local experts: Realtors. These property professionals know what developments, plans and community changes help or hurt each neighbourhood and, as a result, often spot the next best neighbourhood even before the data points the way.
This year’s results show that communities outside of the City of Vancouver continue to dominate, with New Westminster, North Vancouver and Richmond, B.C., grabbing the top three spots.