With the continuous downturn in the housing market in Vancouver, many are asking themselves when (or if) it will stop. Since last year August, real estate sales in Metro Vancouver have dropped 30-50% compared to the levels in 2018. However, experts are still sticking to the idea that this is not a slump but more of a standoff that will pick up soon.
Business in Vancouver held discussion under their BIV Talks Series on March 26th to examine how to survive the current housing market. The panel of four experts was very clear on the fact that investors (developers or first-time buyers) can now find great value in properties that have been affected by prices and sales volatility.
Good opportunities in the housing market
James Lang, associate VP at Colliers International said that Vancouver has been “on a real estate bull run for the last 10 years… [and] we are coming to the end of a natural cycle right now.” He encouraged future buyers to hold their liquidity as there will be lots of opportunities in the coming months.
However, the market will remain with low activity. Cynthia Jagger from Goodman pointed out how the first quarter of 2019 apartment sales were a third of what it was registered during Q1 in 2018. Nonetheless, she pointed out opportunities in strategic properties, to which Carla Guerra, founder and CEO of Purpose Driven Development, quickly added that brownfield sites are being sold at a discount and could be a great source of value.
Where is the housing marketing heading?
As the discussion turned into where the market is going, president and CEO of Fifth Avenue Real Estate Marketing, Scott Brown, said that there are pockets within the region that have had a positive activity and demand in certain areas (from senior to mid-market rental spaces) will see great opportunity. “Don’t forget the demographics,” he said. “We are still going through the most significant aging on the planet. And we’re not building enough product.”
And then there is the issue of affordability. Brown is a believer that the recent budget by the government did not do enough to address the housing market affordability and the supply constraints. Guerra, on the other hand, says that the measures by the government will give investors more housing choices.
The key opportunity
James Lang predicts that now is the time to enter the single-family home market as “they don’t make any more single-family in Vancouver.” The growing population, limited land regulations, and supply constraints are reducing the amount of single-family homes in the market.
It was recommended to study the market and reassess strategies. There is time to buy as the market is at a standoff period.
Abana Capital published its own report dicussing demand and supply dynamics of the current housing market. Topics include affordability, foreing investors, land regulations, and buying opporuntities. To download the report, please click on the link below.
If you want to discuss the current housing market, please reach out using the form below or give us a call to (604) 281.1050.