Q1 2021 Vancouver Real Estate Market Update
The numbers are in for Vancouver for the first quarter 2021. We have very hot market out here.
Here we have Sales, Active listings, Months of Inventory and Benchmark Price for the months of January, February and March. How do we get the Months of Inventory number? We take the Active listings and divide the Sales, it tells us our Months of Inventory. 4-6 months – Balanced market, below 4 months – Seller’s market with prices going up, and above 6 – Buyer’s market with prices starting to weaken. In Sales we did 2389 in January, 3727 in February and 5703 in March. Quite an escalation here happening. Normally, March is going to be better that February and January, but the amount we’re going here is incredible.
Active listings does not mean a lot to me because Months of Inventory tells me everything. We had 3.5 Months of Inventory in January, very strong market – Seller’s market. Then we went to 2.2, becoming a stronger Seller’s market. It means prices are going up faster. And March we are at 1.6, this is a crazy market everybody. What about Benchmark price? Just over a million in January, in February went up to $1.08 million and now we are $1.123, which means we’ve gone over 1.1 in terms of your Benchmark price. The highest we have in Canada.
Let’s look at March 2020 and March 2021. Let’s keep in mind, the last half of March 2020, it started to slow down because of COVID, around the middle of March. We did 6245 sales last march. We did 11.819, that’s up by 89%. No matter what happened in the last half of March 2020, this is a massive number. What happened with prices? Obviously they are going up. Just above the million in 2020 and almost $1,1 million this March. Pretty crazy what’s happening right now overall in the market. I think you can see that as well. Benchmark price up by 6.6%. This is interesting.
Let’s take different property types – detached, townhouses and apartments. Let’s look at first quarter of 2020 and 2021. Look at this. Detached in the first quarter up by 99%, townhouses are up by 84%, apartments up by 85%. You will agree that these numbers are a bit crazy. These are the sales that took place in the first quarter of the last 3 years. So we did 4314 in the first quarter of 2019. Remember, no COVID back there. We did 6245 in 2020. Started out very strong, and then slowed down in the middle of march because of Covid. And we did 11,819 in the first quarter this year. Huge number!
What about prices? Well, in the last six years, we’ve knocked the highest benchmark price we’ve had. You can see here almost $1.1 this year. 2018 was the highest before. Six years from now, we started at $795,000. These are big numbers!
Now I want to talk about what do I see happening and what do I hope happens in the market place. A lot of people are talking about bubble right now and they think it is going to burst and prices are going to bump. It’s going to be painful for us all. I am not personally convinced of that yet, because yes we’ve had a very busy three months and a very busy last quarter at the end of last year. But what I would like to see, and I am hopeful that the market will start to slow down a little bit. I think you will agree what’s going on the last little while is not sustainable long term. You can’t have prices go up at this pace long term, because something negative will eventually happen. However, I do think, over the next 3 to 6 months, we will start to see the market just slow down a little bit. It will still remain the Seller’s market and it is going to be very good. But all of a sudden, maybe we won’t be dealing with 12 or 22 offers, maybe we will be dealing with 1, maybe with 3 offers. That’s when it all start to slow down, which means prices stop rising as fast as they are rising right now.
So, I do think over the next few months we are going to see things hopefully start to slow down a little bit, which by the way will be good for everybody involved – for the Seller, Buyers and for the industry as a whole. And if we start slow down a little bit, then the market becomes sustainable.
Many people were saying that the prices were going up in Vancouver because of immigration! Well, think about this! How much immigration have we had in Vancouver in the last 12 months? Hardly any, because of COVID. So that means that the immigration wasn’t the issue. The issue is supply and demand. There is not enough supply in Vancouver. So all of a sudden, if a demand will start to slow down a little bit, which hopefully it will, then we are going start to see the market stay in a very strong place, but maybe not as crazy as it is right now. Because as crazy it is right now, it’s not going to lead somewhere good if it continues.
We do not know what is going to happen for sure, but that’s what I think what’s going to happen. We are going to see the market slow down a little bit. It will remain a good market for the rest of this year, because of interest rates.