Last week, I attended a session where consultants from CMHC (Canada Mortgage & Housing Corporation) shared stats they have and trends that they see. It's very insightful because CMHC has many statistics that I don't typically have access to and these give us a strong indication of what the market is doing.
1. The number of sales to active listings is very similar to what it was this time last year. The supply of homes on the market is still low in relation to the demand in nearly every price range. This could lead to an upward pressure on prices yet again.
2. This is interesting: for the past few years, and even despite the sharp rise in prices over the past year or so, attached housing has always made up approximately 60% of the sales in the Lower Mainland. This shows that, despite how highly-priced detached housing has become, there's still a strong and stable demand in nearly all price ranges and for nearly all types of housing.
3. When prices rise drastically over a short period of time, generally those who suffer first are the would-be-first-time buyers. However, we're still seeing the new records for numbers of new household starts being established by people who are new to the real estate market or individuals/families new to the area. In other words, prices have gotten high enough to alter what most people are buying, but not so high to completely eliminate many of the first-time buyers in the marketplace.
4. Based on predictions of how many new household starts will occur in the Lower Mainland, it's still a concern that there will be a shortage of new product on the market to meet that demand.
5. All of this has happened despite the amount of money foreign buyers are spending here on a monthly basis dropping by well over 90%.
So, what does all this mean? In short, we expect prices to continue to increase. At the end of the day, the people paying the "outrageous" prices here and now are local people, not foreigners. They're people who've decided that they'd still rather pay whatever it takes to live here than move outside the Lower Mainland where it's noticeably cheaper.
Have any questions? Give us a call and we'd be happy to chat with you!