Royal LePage is predicting a double digit decline in Vancouver’s housing market next year.
With the amount of regulations recently put in place in the region, local market activity has “declined over the past couple of months on the back of critically low inventory levels and waning consumer confidence,” Randy Ryalls, a broker and manager with Royal LePage Sterling Realty, told Daily Hive.
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Vancouver is currently transitioning to more of a buyers’ market, and price appreciation is beginning to normalize given the low amount of sales activity, he explained.
In addition, prices are becoming more negotiable, “as many buyers are waiting for inventory to pick up and the market to settle before jumping back in from the sidelines.”
Up or down?
The long-term direction of the market depends on a couple of factors. “If inventory levels stay low and buyer activity picks up, then prices could rise due to increased competition over the few available listings,” Ryalls explained.
However, if inventory levels rise – as is typical for early in the year – “it will likely create more balanced market conditions.”
The trend, he added, will depend on the level of demand within the market and its overall ability to meet that demand.
Condo vs. detached
A wait-and-see’ approach has been adopted by those looking for a detached home, Ryalls said. But overall, the market is “relatively” more affordable and normalized market for now.
Gains in the detached market are not expected without a “significant increase” in demand from buyers who have decided to wait-and see.
For those on either side of the condo market, no decline is anticipated.
“The condo market is reasonably healthy, and many buyers are interested in the property type because of its affordability relative to the detached segment.”
Activity in this market may also be encouraged by BC’s new first time buyer program.
“If prospective buyers choose existing condos rather than new units, it may also buoy the ‘move up’ market somewhat,” Ryalls said. “If the majority of those buyers buy new, it will not have the same effect.”
Looking ahead, making predictions
Going forward into the New Year, Ryalls said there is some indication that commercial markets as well as residential markets outside of the Lower Mainland are benefitting from the new tax put in place earlier this year.
He predicted that the condo market will “likely outperform the detached segment and provide excellent opportunities for buyers in the immediate future.”
For buyers in the detached home market, conditions are favourable, as competition has somewhat settled.
Finally, he said, there are still buyers in the market and “those who have priced their property correctly will find success.”