Spring came early this year with record breaking sales coupled with a low number of new listings, leading to another surge in prices across all categories and neighbourhoods. The new development is the recent strong activity in condos & townhouses - what we have seen for the past several years in detached houses is now happening in attached housing as well. This was inevitable - as prices climbed in houses it was only a matter if time before we saw increased sales activity and corresponding price increases in townhouses and condos.
Some of this is first-time buyers deciding it’s now or never, but plenty of the activity is fuelled by downsizers who have sold the detached family home and are making the move into a strata. And condo sellers who have been priced out of the detached market and are trading up for something bigger & better. There is particular pressure on larger luxury condos in popular neighbourhoods – Coal Harbour, Downtown, Yaletown, False Creek, Kitsilano and Mount Pleasant neighbourhoods have all seen year-over-year price increases of 20-30%. While there are some new developments in the pipeline, demand is now exceeding supply, leading to multiple offers and selling prices often over the asking price.
While a significant portion of sales continues to be fuelled by new immigrants and overseas investors seeking a safe haven for capital, the majority of sales are to locals, either citizens or permanent residents. There’s plenty of discussion amongst politicians and the media about how to deal with rising prices and the increasing difficulty of regular folks to be able to afford a home, but until either supply is increased (ie more development & densification) and/or demand is curtailed (ie changes in residency requirements, restriction of foreign capital, an economic downturn or higher interest rates) there is little likelihood we’ll see any change in the market. What we’re experiencing is the result of deliberate government policies over the past 30 years to woo Pacific Rim investors and immigration, and of course the free flow of capital in a global market. Like it or not, a significant chunk of our local economic activity is fuelled by real estate, construction, related good & services, and the discretionary spending of relatively wealthy new immigrants. We live in a desirable and beautiful place with good governance and a high quality of life – and the world has taken notice.
There are continuing challenges for both buyers & sellers in this market. For sellers, we’re seeing a greater reluctance to list because of the difficulty of finding a suitable new home to move to. It’s a reversal of the conventional wisdom of selling first and then buying – more and more people are either waiting to buy before listing their property for sale, or just staying put. So supply remains tight and the current seller’s market continues. For buyers the challenges are obvious, limited supply and lots of competition at all price points for most product. It’s never been more important for buyers to have their financing lined up and to be prepared to act with a strong offer and accelerated due diligence.
All of this speaks to the continued importance of having a trusted real estate advisor in your corner.
For sellers - the latest sales data and a proven marketing strategy are key to getting the highest price for your property. The current market is incredibly dynamic and the sales process must be competently and professionally managed, or you risk leaving tens of thousands of dollars on the table. If you’ve been approached by someone who claims to have a buyer for your home, be sure to consult with a Realtor who will represent only your interests in any transaction. A private deal that purports to save you a commission can end up costing you many times any supposed savings by not exposing your property to the marketplace.
For buyers – now more than ever you need to have an agent who is on top of the latest listings and can craft an offer that gives you the best chance of securing you the home that meets your needs.
A final word about fiduciary duty and loyalty – there’s been lots of chatter in the media about assignments, shadow flipping and secret commissions. Bottom line, your real estate agent owes you their undivided loyalty and utmost professional competence. And of course, full disclosure of ANY potential conflicts of interest. Over many years we’ve earned the trust of our clients and respect of our peers. We promise you we will always put your interest above all others and make sure you have all the information you need to make your best deal. You have our word.