Despite facing many uncertainties earlier in the year, the Vancouver real estate market is thriving, with strong demand and price appreciation. Despite being one of the most beautiful and culturally rich cities in Canada , many speculated that the COVID-19 pandemic would lead to a decrease in sales. I, like many fellow Vancouver Realtors, found the exact opposite. The market heated up in July and August, with significant increases in detached and townhome sales across Vancouver.
Throughout the summer months, we recorded a boom in detached home sales, increasing more than five per cent in some areas of Vancouver. I attribute this change in the market to several factors, much of it driven by end-users rather than investors.
I am optimistic about the market’s growth, with increased demand and multiple-offer situations becoming a frequent occurrence – especially in the detached housing market. As more people move away from strata, there is an increased demand for detached homes at a similar, more affordable price point.
Another contributing factor is the historically low interest rates. With rates being so low, appraisals are still coming in at a moderate rate, allowing agents to better leverage the market.
While the detached housing market heats up, agents are seeing a slight shift in condo sales. The demand for condos and strata homes is decreasing, with both sales and rentals showing less demand. Rent has been affected due to the lack of demand from AirBnB guests and international students. It’s safe to speculate that the changes in international travel as a result of COVID-19 has resulted in less interest in rental properties for the time being. Buyers are less likely to buy from an investor standpoint given the low demand for rentals, as the risk of having an empty property remains very real in our current predicament.
Despite this shift, the condo market remains hot in certain neighbourhoods. This demand is entirely driven by the users, as investors are less likely to look for rental properties or homes to flip at this time.
There are a few reasons for this shift, but one prominent reason is the demand for more space and bedrooms that can be converted into a home office. With more people working from home during the pandemic, having a workspace is much more desirable for the long term. Detached, affordable areas closer to the city is where we are beginning to see this shift take place. Coquitlam, for example, has seen a large increase in townhome sales, with August sales being 36.4 per cent higher than they were in 2019. North Burnaby shows a similar trend, with an 81.3 per cent increase in detached home sales when compared to August 2019. People want to have more space and be closer to recreational properties and opportunities. We are now seeing more buyers look to areas just outside of Vancouver, with townhomes and detached home sales increasing in Coquitlam, Burnaby and Richmond.
I am optimistic about the growth we are seeing in the Vancouver market and surrounding areas. It’s a promising sign for local agents.