Market News

As we enter the fall of 2024, Vancouver’s real estate market shows clear shifts, particularly in the luxury segments across Downtown, the Westside, and East Vancouver. Here’s a breakdown of the current market conditions by area and segment.

Downtown Luxury Condos

The luxury condo market in Downtown Vancouver is undeniably struggling this year. Only 17 sales have been recorded for condos priced over $4,000,000 year to date in 2024. For context, here’s how this compares to recent years:

• 39 sales in 2017
• 41 sales in 2020
• 40 sales in 2021
• 32 sales in 2022
• 22 sales in 2023
• And just 17 sales so far in 2024.

This trend reflects a broader slowdown, and the issue isn’t just with Downtown itself. The decline is largely tied to the cooling of the Westside’s luxury detached housing market, which has traditionally fueled demand for high-end condos.

Westside Luxury Homes

To see the correlation, consider the Westside luxury detached home market. In 2016, there were 147 sales of homes priced over $6,000,000. By 2017, this number dropped to 110, and the trend continued:

• 52 sales in 2018
• 31 sales in 2019
• A slight recovery to 51 sales during the COVID-19-driven market in 2020
• And 43 sales so far in 2024.

The connection between these segments is key. Many Westside luxury home sellers are downsizing and typically funnel their proceeds into downtown luxury condos. However, with fewer high-end home sales, there’s less capital flowing into the luxury condo market. As a result, demand for these condos has softened, leading to an oversupply.

Inventory and Pre-Sales

Right now, the downtown luxury condo market faces a surplus. There are 69 condos priced over $4,000,000 currently for sale, which equates to more than a year’s worth of inventory. Many of these condos have been on the market for years, with buyers hesitant due to both pricing and market uncertainty. Additionally, luxury condo pre-sales are at a standstill, reflecting a lack of confidence and demand in this segment.

East Vancouver: A Market on the Rise

In contrast, East Vancouver is thriving, particularly in the detached home market. Historically seen as a more affordable alternative to the Westside, East Vancouver is now attracting buyers willing to pay high prices, particularly in neighborhoods like Main Street and Mount Pleasant. These areas are approaching price parity with Westside neighborhoods like Kitsilano and Dunbar for comparable lot sizes.

So far in 2024, there have been 43 sales of detached homes over $2,000,000 in East Vancouver. Here’s how that compares to previous years:

• 22 sales over $2,000,000 in 2023
• 23 sales in 2022
• 39 sales during the COVID-19 buying surge in 2021
• And just 10 sales over $2,000,000 in 2017.

This growth shows that East Vancouver continues to rise at one of the fastest rates in the city, proving to be a strong investment opportunity both now and moving forward.

Reducing Interest Rate Environment

What will the market bring as we are now entering the return to a lower interest rate environment. The bank of Canada just dropped interest rates a ½ percent this morning with continued reduced interest rates expected as we head into 2025. Are we finally headed towards a run on real estate again. I think so, especially for the Westside markets. In many of those detached market segments prices have not seen peaks since 2017 and it’s a matter of time before the bar is lifted once again. 

Multiplexes: Vancouver’s Solution to the Missing Middle Housing Crisis

The City of Vancouver is making strides in addressing the critical need for housing options that cater to the “missing middle” market—families and individuals seeking affordable, family-sized homes but unable to afford detached houses. One of the most impactful solutions on the horizon is the introduction of multiplexes, commonly referred to as townhomes or multi-family dwellings.

As we approach 2025 and beyond, we will see a significant increase in multiplex developments across Vancouver. According to city data, approximately 1,250 new 2-3 bedroom townhomes will hit the market, providing much-needed options for families looking to settle in Vancouver’s competitive housing landscape.

What is a Multiplex?

Multiplexes are multi-unit homes designed to fit within existing residential neighborhoods. These developments can range from duplexes to fourplexes or more, with 2-3 bedroom units offering an ideal space for families. The goal is to create higher-density living options while maintaining the character of Vancouver’s neighborhoods, without resorting to high-rise developments.

This housing option targets the middle-income population, often referred to as the “missing middle,” who struggle to find homes that are both affordable and large enough for family living. Traditionally, families have been squeezed between expensive single-family homes and smaller apartments, neither of which meet their needs.

The Flood of New Listings

As the multiplex trend takes hold, the Vancouver market will soon see a surge of these homes. The City of Vancouver’s approach is smart—by flooding the market with over 1,250 units aimed specifically at this demographic, it will help ease the pressures on the housing market. These townhomes are being spread across various neighborhoods, as shown in the multiplex map 

which highlights where the developments are set to take place.

You can explore the full scope of this new housing strategy using tools like the City Duo Multiplex Map and Tracker, which offers a detailed breakdown of where new multiplexes are being built and their current status. Check out the map here: City Duo Multiplex Map and Tracker.

A Step Toward Affordability

While Vancouver has long been plagued by high housing prices, multiplexes offer a promising step towards more attainable housing options. With more units available, families who might have been priced out of the detached home market can now find more affordable alternatives, often in the same desirable neighborhoods.

Moreover, these homes are designed to provide flexibility. Whether you’re a young family looking for space to grow, or empty-nesters downsizing from a single-family home, multiplexes offer a compromise between space and affordability.

Challenges Ahead

Despite the promise multiplexes hold, there are still challenges to be addressed. For one, the construction and approval process can take time, and community buy-in is essential. Some residents of traditionally single-family neighborhoods may resist the higher-density developments, raising concerns about changes to neighborhood character, parking, and local amenities.

Another concern is whether these townhomes will indeed meet the affordability criteria for middle-income families. If prices continue to rise across the city, even these multiplexes could end up out of reach for the demographic they were designed to help.

Looking Ahead

As Vancouver continues to grapple with housing affordability and availability, multiplexes are shaping up to be an essential part of the solution. With over 1,250 units expected to flood the market in the next few years, Vancouver is taking bold steps to provide more housing options for the missing middle. If you want to stay updated on multiplexes and how they can fit into your real estate goals, feel free to reach out, and we’ll guide you through the market.

Market Synopsis: Fall 2024

As we move through the fall season, it’s clear that the Vancouver real estate market continues to show resilience, but with distinct trends based on quality and pricing.

What’s Selling?

Buyers today are increasingly selective, looking for special, well-built homes that boast outstanding features. These properties—whether it’s a standout location, exceptional design, or unique amenities—are still selling well, even in the current market conditions. Homes that tick all the boxes and sit in desirable neighborhoods or price points are receiving attention and offers.

On the other end of the spectrum, the most well-priced entry-level homes are moving quickly. In fact, this segment continues to see high demand, with some properties even receiving multiple offers, despite the overall market cooling in other areas. First-time buyers and investors alike are competing for these affordable options, making it a fast-moving part of the market.

Where Does Your Home Fit?

Whether you’re sitting on a high-quality property with standout features or thinking about selling an entry-level home, it’s crucial to understand where your home fits into the current market. If you’re curious about how your property might perform in today’s landscape, feel free to give us a call or stop by the office. We’d be happy to provide a personalized evaluation and guide you through the next steps.

Impact of Bank of Canada’s Interest Rate Decrease on Vancouver’s Real Estate Market

In the wake of last week’s decision by the Bank of Canada to decrease interest rates, the Vancouver real estate market stands at a pivotal juncture. While this move may not trigger an immediate surge in demand, it is poised to instill positive sentiment and provide reassurance to prospective buyers. More significantly, it signals the beginning of a rate reduction cycle, which could gradually influence the dynamics of the real estate landscape.

As we’ve seen in the past, we anticipate that the effects of this rate decrease will first manifest in the entry points of each segment of the market. As interest rates decline, investors may begin to reconsider selling off their investment properties, and buyers may find themselves in a more favorable position to enter the market or upgrade their existing properties. This initial impact will likely create a “bottom-up” ripple effect, gradually permeating through all segments of the market.

For those contemplating a purchase, the current scenario presents a unique opportunity. With inventory levels as high as we’ve seen in recent years, and recent sales activity as low as we’ve seen in two decades, buyers have an abundance of options to choose from and can enjoy the absence of intense competition in multiple offer situations, which provides a conducive environment for informed decision-making. However, it’s essential to note that this landscape may evolve as rates continue to decrease.

As the rate-reducing cycle unfolds, prospective buyers are advised to remain vigilant. While the current conditions favor buyers with ample choices and reduced competition, this dynamic could shift with further decreases in interest rates. Therefore, now may indeed be an opportune moment to seize upon the available inventory and make informed investments.

While the recent interest rate decrease may not spark an immediate surge in demand, its impact on the Vancouver real estate market is poised to be both gradual and potentially significant over the next 6 to 18 months. We are encouraging our clients to evaluate their options and consider capitalizing on the current market dynamics.

Westside Market:

Finding detached houses on the Westside is becoming increasingly rare. The scarcity of available properties is pushing prices up, driven in part by new multiplex zoning regulations. Builders and developers are now fiercely competing with buyers seeking homes for personal residence, reshaping this coveted market. We anticipate that Westside detached homes will continue to be one of the strongest market segments for 2024.

East Vancouver Market:

East Vancouver mirrors the Westside’s scarcity of detached houses, intensifying competition among buyers. Half-duplexes are highly sought after, reflecting a trend towards more compact living spaces and more affordability compared to single family detached homes. Despite this, the inventory of townhomes and condos remains relatively high, offering alternatives for those seeking housing solutions.

Downtown Market:

In Downtown Vancouver, the condo market remains sturdy, with prices holding steady overall. However, luxury condo prices are starting to decline, influenced by a shifting interest rate environment. Softening in the rental market and the prevalence of higher variable rate mortgages are prompting some property owners (specifically investors) to consider selling, adding fluidity to market dynamics.

Trends & New Regulations:

BC Government – Flipping Tax: The BC government’s introduction of a tax of up to 20% on profits from property sales within two years is set to impact both supply and demand dynamics in the real estate market. On the supply side, the tax may deter short-term speculative behavior as sellers face significant financial disincentives to quick flips, potentially reducing available properties in the short term. Conversely, on the demand side, prospective buyers, particularly investors seeking quick returns, may become more cautious, potentially dampening demand for short-term investment properties. All that said, recent statistics have shown that this new Flipping Tax will likely impact less than 4% of the transactions in BC, and when you factor in all the exemptions that would apply to many of those, the number drops further. So while the intent of the tax is to contribute to moderating price escalation and fostering more stable market conditions, we are not optimistic about the real world results. Time will tell.

Changes in BC’s Short Term Rental Market:

Sweeping changes are underway in BC’s short-term rental market, driven by new provincial regulations. Premier David Eby announced a multi-faceted approach to addressing the housing affordability and supply crisis. The proposed legislation aims to eliminate multi-property short-term rental businesses while allowing homeowners to lease spaces within their principal residence and secondary suites on platforms like Airbnb and Vrbo. Enhanced enforcement tools, including a provincial enforcement unit, increased fines, and a provincial registry tracking home usage for overnight accommodations, will be implemented. Additionally, Vancouver’s short-term rental license fee will rise from $109 to $1,000. These measures represent an enhancement of regulations province-wide, aligning with the goal of balancing the sharing economy with housing availability for residents.

Let’s Connect!

Navigating Vancouver’s real estate market can be complex, especially amid evolving trends. Whether you’re a buyer, seller, or investor, grasping these nuances is essential for informed decision-making. If you seek personalized insights or guidance on how these market trends may impact your property or real estate strategy, don’t hesitate to reach out to our team. We’re here to help you navigate Vancouver’s real estate landscape. Contact us for more information or to schedule a consultation. Our experienced team is dedicated to providing expert guidance every step of the way. Stay informed, stay empowered, and let’s unlock Vancouver’s real estate market potential together.

February Market Update Video!

Canada’s Housing Affordability Crisis

British Columbia Housing Price Predictions

As we stride into the ever-evolving terrain of real estate, the Canadian Mortgage and Housing Corporation (CMHC) has cast a spotlight on the challenges and opportunities that lie ahead. In a recent report, the CMHC unveils a prediction of a 76%-89% increase in the cost of housing by 2030 in British Columbia, driven by a delicate interplay of population dynamics, interest rates, construction starts, and immigration policies. It should be noted that we’ve already seen around 20% increase in prices since 2019. CMHC tends to be fairly conservative in it’s predictions.

At-a-Glance: The Pulse of Canada’s Housing Future

The CMHC’s steadfast projection for 2022 remains unchanged — Canada is slated to require an additional 3.5 million housing units by 2030 to reinstate affordability to the market. However, as with any forecast, the devil is in the details, and this projection unfolds against the backdrop of a myriad of factors.

Regional Dynamics: Where the Heart of the Matter Lies

Housing demand, akin to a symphony, varies in its composition across the diverse provinces of our great nation. The report emphasizes that the lion’s share of housing supply gaps is concentrated in Ontario and our very own British Columbia. Yet, the story doesn’t end there; the provinces of Quebec and Alberta are also earmarked for increased demand, fueled by the flames of economic growth.

A Smaller Housing Stock on the Horizon: Decoding the Decline

Perhaps the most intriguing revelation from the report is the projection of a smaller overall housing stock in 2030 compared to last year’s estimates. The culprit behind this decline is none other than the current shortfall in housing construction.

Untangling the Threads: Population, Rates, Starts, and Policy Changes

The CMHC meticulously weaves together the threads that form the tapestry of our housing future. Population growth, dancing with interest rates, choreographed by construction starts, and influenced by immigration policies — a delicate ballet that shapes the affordability landscape. As we navigate this intricate dance, it becomes increasingly evident that each move, each policy decision, ripples through the fabric of our housing market.

In the vibrant and ever-changing real estate market of Vancouver, detached single-family homes have emerged as a solid long-term investment option. The allure of these spacious, standalone residences is driven by various factors, including their increasing rarity, the shifting focus of developers towards higher density housing options, and the seller’s market that persists even in the face of high-interest rates. For those fortunate enough to own a single-family home in Vancouver, it’s not just a place to call home but also a valuable asset with promising long-term returns.

The city’s limited geographical footprint, coupled with stringent zoning regulations, has made single-family homes a diminishing resource. Vancouver’s ever-growing population and urbanization have led developers to turn their attention towards building higher-density housing options. The pressure to accommodate more people in the same urban space has resulted in the emergence of duplexes and multiplex projects, often on lots that were once zoned for single-family homes.

As the city continues to evolve and densify, the coveted single-family homes become an even more elusive housing option. This shift towards higher density options does not just impact the availability of single-family homes; it also contributes to the appreciation of their value. As supply diminishes, demand continues to grow, and this scarcity drives prices higher.

Vancouver’s real estate market has, for years, favored sellers of single-family homes, even amidst fluctuating interest rates, and have proven themselves as excellent long-term investments. The potential for substantial appreciation in value over time is a significant draw for buyers who have the financial means to enter this market. As more single-family-zoned lots get converted to duplexes and multiplex projects, the value of existing single-family homes continues to rise. This upward trajectory is expected to persist, making these homes an enticing investment for those who can afford them. Even in periods of economic uncertainty and market fluctuations, these homes tend to hold their value and provide flexibility in terms of having a mortgage helped through suites and/or laneway houses. Despite the overall ‘soft’ market we are currently experiencing, it is still a seller’s market for detached homes in most pockets of our city.

If you own a single-family home and are curious of its current value, or are a buyer thinking about purchasing one, please reach out to us to further discuss your goals and situation.

Single Family Homes from Roch & Weeks on Vimeo.

On September 15th, Vancouver’s city council gave their approval to a comprehensive zoning amendment with far-reaching implications. This amendment opens the door for the construction of up to 8 homes on single-family lots within all RS (Single Family) zoning areas. This novel zoning category, known as R1, presents a significant opportunity to address the housing needs of the “missing middle” generation, who seek relatively affordable housing options, both for ownership and rental, throughout our city.

Under this new zoning, the more modest 33×122 lots will accommodate up to 4 homes, whereas the larger lots will permit 6 strata (for sale) ownership units. Additionally, there’s an opportunity to construct up to 8 homes on the larger lots, provided they are designated as market rental units. This transformative change is poised to reshape our city, with some viewing it as a positive development while others express concerns, particularly among existing homeowners in quiet single-family neighborhoods. 

These newly termed “multiplexes” will boast a 1.0 FSR (Floor Space Ratio), equivalent to 100% of the lot size in buildable square footage. For instance, a typical 33×122 lot would yield approximately four homes, each spanning around 1000 square feet. These homes are likely to include a mix of 2 and 3-bedroom townhouses. On the other hand, larger lots will accommodate up to 6 homes, predominantly designed as 3-bedroom townhouses to cater to families. There is also going to be additional density bonuses for Net Zero built houses with an emphasis on green construction and energy efficiency. 

With that said, this new R1 zoning isn’t all about increases in density. The city has also implemented a 10% reduction in density for the allowable size of single-family homes, going from 70% FSR down to 60% FSR, likely to encourage the higher density developments.

Despite the general increases in density and relaxations through rentals and green construction, there remain numerous uncertainties surrounding these initiatives, including issues like parking provisions and the associated city fees for project development. Undoubtedly, this new zoning will bring about profound changes to our cityscape, marking a shift away from the traditional single-family home, which was once considered a luxury.

If you seek more information about how these changes will impact your property and neighborhood, please feel free to reach out.

Greetings, valued clients and friends of Roch & Weeks Real Estate. We trust this newsletter finds you in good health and high spirits. As we transition into the vibrant colours of fall, we wanted to provide you with an update on the state of the Vancouver real estate market and share our insights into what the coming months might hold.

Reflecting on 2023 So Far

The market has been impacted by several increases in interest rates, but so far we’ve been surprised to see how inventory has remained at historic lows. We anticipate that to change as the reality of ‘higher for longer’ interest rates impacts homeowners and investors. For many investors that have variable interest rate mortgages, they’ve likely gone from cash flow positive to cash flow negative, and have had to start feeding their investment monthly. This has caused many of these owners to consider selling and exiting the rental market. For homeowners that bought over the last 2-3 years with fixed rate mortgages, they are starting to worry about their upcoming renewal. We anticipate many of these homeowners will struggle to keep up with payments, or in some cases, have difficulty qualifying for a renewal on their homes.

Looking ahead to the Fall

As we enter the second selling season of real estate, we suspect that more homes come onto the market. We will also see price reductions on properties that were on the market throughout the spring and summer that did not sell. This will definitely create more buying opportunities this fall. As predicted the Bank of Canada held rates yesterday, which is positive news for many homeowners, but we are now just starting to see the lagged effects of the past 18 months of interest rate hikes. As the effects start to make their way through the economy, there will unfortunately be difficult times ahead for many renters, investors and homeowners alike.

Supply Dynamics and Future Trends

Specific market segments and pockets of the city are experiencing low inventory, so as a result well-priced new listings within these segments are encountering substantial demand. Move-in ready detached homes in desirable neighborhoods remain scarce commodities, and this scarcity is projected to persist throughout the remainder of the year. Affordability is going to remain the challenge for buyers in this higher interest rate environment, and we don’t see that changing until we see interest rates lowering.

During these times of dynamic and ever-changing metrics, we believe it is important to be extra prudent when it comes to your real estate situation. If you’re considering your next real estate move, whether it’s a purchase or sale, we encourage you to reach out to us. Our dedicated team of 5 professionals, with over 50 combined years of experience, is here to provide full-service support.

VANCOUVER REAL ESTATE – February Market Update

January brought a flurry of activity into our marketplace. We have already sold 12 homes totaling $24,000,000. This was a huge uptick in activity compared to the last few months. It would seem to me that buyers are getting used to the new interest rate environment and that people are no longer able to wait on the sidelines watching the market. Despite rocky times in the market buyers continue to need to move for many of life’s reasons including having baby’s, getting married, divorced, and downsizing. Times like this make people realize that their homes aren’t just an investment, they are their haven’s and places to enjoy family and friends. 

While the market continues to be sluggish overall there are still a few nice properties that come on the market here and there. When they do come up, they do not last long and are quickly snatched. We work in all of the segments of the market, and within various sub markets, we are seeing different stories emerge. Here are a few key observations of late in different market segments: 

Entry level condos: If priced well these homes are selling and with multiple offers. 

Mid level condos and townhomes: Affordability for buyers is an issue. Well priced 3 bedroom condos and townhomes are hard to find because there is low inventory. 

½ Duplexes: This segment of the market remains hot. In East Van, prices are down from a peak of an average of $2,000,000, and are now closer to an average of $1,800,000 for nice and newer homes. The Westside has low inventory, which continues to put upward pressure on pricing, and sales in this segment are at all time highs. 

Luxury Condos: There is a lot of inventory and sellers are holding prices hoping demand comes up to meet them. The opposite has taken effect, especially downtown, where inventory steadily rises, which will create more downward pressure in terms of pricing on this segment. We expect to see some forced sales in the coming months. 

Entry level detached homes: Move in ready houses are still selling quickly with little inventory. “Land value,” type properties are slow to move with few interested buyers, unless they are well priced. Developers are sitting on their money, waiting for prices to come down while building costs and labour are elevated.

Luxury detached houses: Prices are down substantially, however, inventory is low and buyers are only purchasing if the downturn over the past 6 months has been factored into the price. Large land value type properties are sitting and getting very little action. 

If you are interested in having an up to date market evaluation of your home don’t hesitate to reach out or stop by our office at 6158 East Boulevard and we look forward to chatting with you.