Year-End Inventory Level in Greater Vancouver

*Source: REBGV

Total Inventory has risen back to normal levels in 2018 and is poised to rise 3k to 5k more this year in 2019.

2018 Review: Annual Sales

Total sales hit rock bottom in 2018 finishing just lower than 2008 and 2012.  As REBGV reported, this was the lowest total since 2000.

*Source: REBGV

2018 Review: Yearly New Listings

New Listings in 2018 did not change very much keeping the total inventory somewhat at bay but a high new listings year in 2019 could bring the house down (as in 2008).

*Source: REBGV

2018 Review: Yearly Listing Expirations

Listing Expirations returned to average levels in 2018 after 3 years of high Sale to Active Listing Ratio that led to low # of Expirations from 2015 to 2017.

*Source: REBGV

Sale to Active Listing Ratio by Dwelling Type per Real Estate Board of Greater Vancouver (REBGV)

*Source: REBGV

The highlights:

Detached market left the seller's market in July, 2017 and entered the buyer's market in June, 2018.

Attached market left the seller's market in August, 2018 and has entered the buyer's market last month in December, 2018.

Condo market left the seller's market in September, 2018.

The market trend is merging between the different dwelling types.  The market trend is likely to move in conjunction between the different dwelling types in 2019.

The Four Data Points that Matter

Understanding the Data that Impacts the Market Trend

There are 4 critical data points that impact the Net Inventory.

1. Sales
2. New Re-sale Listings
3. Listing Expirations/De-Listings
4. New Unabsorbed Construction


Net Positive Effect in Total Inventory
1. New Re-sale Listing
2. New Unabsorbed Construction

Net Negative Effect in Total Inventory
1. Sales
2. Listing Expirations/De-listings


Critical factors that impact the Four Data Points:
1. Bank of Canada interest rate change
2. Net population growth
3. Municipal/Provincial/Federal gov't policy change (Foreign Buyer Tax, Stringent Mortgage Restrictions)
4. Municipal job growth/unemployment rate
5. Canadian economy/exchange rate vs. USA/China and other countries
6. Public sentiment/Media coverage
7. Acts of God (earthquake, etc)

2018 Review: Vancouver CMA Housing Completions

Historical Annual Housing Completions

Housing completion broke all time record in Vancouver CMA in 2018 and is expected to exceed this record in 2019 as explained in the blog below.

*Source: CMHC

2019 Projections Explained: Housing Under Construction/Housing Completions

Historical Year-End Housing Under Construction

*Source: CMHC

Year 2018 marked the first year since 2010 where we saw a decrease in the number of housing under construction.  In other words, the developers are finally straying from the building frenzy that has highlighted the last 3 years.  This is an appropriate reaction to the Vancouver housing market that has started to cool during the latter half of 2018.

Year 2019 should see further decrease in construction as housing starts continue to fall during the cooling year while many of the current constructions complete.

Up-to-date Average Length of Construction in Vancouver (CMHC):
Detached: 12.5 months
Attached: 12.0 to 12.4 months
Condos: 22.1 months

Estimated Completions of Construction by Housing Types in 2019:
Detached: ~4,500 to 5,000
Attached: ~3,000
Condos: ~16,500-18,000

Total Projected Completion in 2019: ~ 24,000 to 26,000 (projected to be near or at record level)

Housing Completions in 2018: 24,555 (all time high for Vancouver)
Housing Completions in 2017: 21,806

In 2018, record Housing Completion led to roughly ~4,500 rise in Total Inventory in Vancouver CMA year-over-year of which ~3,500 rose in REBGV territory and ~1,000 rose in FVREB territory.

In 2017, Housing Completion of 21,806 made no difference to Total Housing Inventory in Vancouver CMA (in the setting of a higher than 10-year average yearly sales).

If one were to make an assumption (for the sake of making a prediction) that the # of sales, new listings, expired listings, migration new construction absorptions are the same in 2019 as it was in 2018, then one could assume that a projected completion in 2019 of 24,000 to 26,000 will lead to a rise in Total Inventory in Vancouver CMA by around ~5,000 (of which about ~4,000 of the rise will be in the REBGV territory).

Of course, the variations in sales, new listings, expired listings, immigration and absorption in 2019 in comparison to 2018 will impact this projection.  And I will be posting to provide regular update on these data.

2018 Review: Vancouver CMA Housing Starts

Vancouver CMA Construction Data for all Housing Types

Year 2018 is the first time since 2013 where we have seen "Housing Completions" exceed that of "Housing Starts" in Vancouver CMA.

In 2013, Housing Completions exceeded Housing Starts for only brief period of time and did not decrease the number of homes Under Construction.

However, 2019 will very likely follow the trend where Housing Completions will exceed Housing Starts as developers continue to shy away from the Vancouver market.  Year 2019 will appear much like 2008-2009 when housing starts fell off the cliff from 20,000+ to 8,300 as the developers ran as fast they could during the last housing recession.

Housing starts have fallen from 26,204 in 2017 to 23,404 already in 2018.  In 2019, don't be surprised to see housing starts fall 15-40% year-over-year.

Historical Annual Vancouver Housing Starts

This data is up-to-date up to the month of December, 2018.

* Source: CMHC

VURED Objective

VURED is a new blogging site that will strive to provide the most up-to-date pertinent real estate data for information sharing on Vancouver Housing Market.  The motive is to provide market intelligence for the public in a non-biased manner so that the readers are well-informed about the market trend.  The blog will be designed such that the reader can form his/her own decision on one of the most important financial decisions of his/her life.

VURED Admin