In this month a year ago Eastside detached house sales had been tracking lower for four straight months after the foreign-homebuyer tax was introduced in August.
In November 2016 just 42 houses sold, detached sales were down 44% for the year and the benchmark price was $1.42 million. Some suggested that the this was the new normal, that the market had peaked and was in decline. In the first 11 months of this year, however, Eastside detached houses are 16.4% higher than in 2016 and the benchmark price is up nearly 7% to $1.57 million. Last November we urged buyers to take advantage of the buyer’s market. Those that did reaped an average return of $95,000 within a year.
Right now there is a healthy inventory of new listings of detached houses on the Eastside and the sales-to-listing ratio is a low 30%, signalling a buyer’s advantage, especially for higher-priced listings. For example, 53 houses were listed for $2.25 million or more in November. Only 3 sold. For those who have aspired to owning a luxury Vancouver detached house, this represents perhaps one of those rare moments to make an investment of a lifetime. We know it is a difficult decision. That is why the Peace of Mind Guarantee for Buyers, offered exclusively by Faith Wilson Group, is so important. The Guarantee allows you to make a calm and confident buying decision on the Vancouver house you really want.
The effect of Vancouver’s density zoning for detached lots has increased land assemblies in many Eastside neighbourhoods. Renfrew and Renfrew Heights, for example, led all of the Eastside in November sales, with 16 detached houses bought for a benchmark price of $1.46 million, but some lots for development land assemblies have sold for twice that, even more. City zoning allows from 2 to 4 homes to be added to a single detached lot, including a laneway house.
Government actions are influencing housing and the Eastside townhouse market is a good example. There is a severe shortage of new townhouses on the Eastside – in fact there were only four new townhouses that had completed and not sold across Metro Vancouver as of the end of Q3 – largely due to city permit delays.
On January 1, the federal government will introduce the second mortgage “stress test” that will restrict the ability of some buyers to purchase the home they want. About 12% of potential buyers may not qualify and it will reduce the average buying power by approximately 17%. For instance if you could qualify now for a $700,000 townhouse, you may only qualify for a $581,000 townhouse in January. This helps explain why sales of Eastside townhouses have recently increased so quickly compared to a year ago, rising 78% in September, 50% in October and 45.5% in November.
There were 60 new listings for townhouses on the Eastside in November and 32 sales, resulting in a balanced sales-to-new-listing ratio of 53%, but the sales success ratio was much higher at certain price points. The ratio was 100% for new listings priced at from $650,000 to $800,000 and only began dropping when new listings ascended to a benchmark price of $1.25 million or higher. Only 14% of the 14 new listings priced at $1.24 million or more sold. The most sales,11, were priced from $1 million to $1.25 million in November, at a sales ratio of 41%. Sophisticated Eastside buyers are apparently shopping for value, not just the lowest price.
The Eastside benchmark townhouse price in November was $861,900, up less than 1% from October but 12.6% higher than a year earlier. The most sales were in the highest-priced Mount Pleasant neighbourhood where 7 townhouses sold at a benchmark of $1.17 million.The lowest-priced townhouse sales were in Killarney, at $625,800, and Champlain Heights, at $722,100.
Eastside condominium apartment sellers were sitting pretty this November. The sales-to-new-listing ratio was 73%, clearly a seller’s advantage, and the typical new listing sold within a median of 8 days, a pace consistent for six months. As well, the benchmark condo price was slightly higher than a month earlier and up 23.4% from last November. What could possibly go wrong? Well, condo sellers should not be lulled into inaction because there are some subtle warning signals. First is the fairly high number of new listings, with about 200 being added each month. Second is the recent near halt in price appreciation, with November benchmark prices up just 0.34% from October, and actually down slightly in four Eastside neighbourhoods. Third is that sales in November were down year-over-year for the first time in six months. Finally, the new “stress test” mortgage rules in January may have artificially increased condo sales recently but could have the reverse effect early in 2018.
Sellers should keep on track with a smart sales strategy now: this means having the property spotless and perhaps even staged;
being certain that the listing price reflects true market value; and that your real estate agency has an effective, multi-lingual and multi-platform marketing system with proven results. Faith Wilson Group offers the exclusive Peace of Mind Guarantee for Sellers which gives an extra degree of security regardless of the market environment.
November Eastside condo sales were not divided evenly though all but one neighbourhood posted sales. Mount Pleasant accounted for a third of all condo sales in the month, with 42 at a price of $538,000. Collingwood, with 23, was second; tied for third with15 sales, were Champlain Heights and Fraser. The overall benchmark price was $540,300, up 2% from three months ago. The lowest price condo sales, at $438,200, was in Killarney.
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