Metro Vancouver’s benchmark home price falls below $1M for first time in two years

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VANCOUVER — Metro Vancouver’s once hot housing market is experiencing an “expectation gap” between buyers and sellers as the benchmark property price fell under $1 million for the first time since May 2017.

Homes are pictured in Vancouver, Tuesday, Apr 16, 2019. The benchmark price of a home in Metro Vancouver fell below $1 million for the first time since May 2017 last month.THE CANADIAN PRESS/Jonathan Hayward

“Sellers are often trying to get yesterday’s values for their homes, while buyers are taking a cautious, wait-and-see approach,” Ashley Smith, the real estate board’s president, said in a statement.

The composite benchmark price for detached houses, townhomes and condos in Metro Vancouver was $998,700 in June, said the Real Estate Board of Greater Vancouver. That’s down 9.6 per cent from the same time last year and 0.8 per cent from May.

Detached houses saw the biggest drop, falling 10.9 per cent from June 2018 to $1,423,500. However, the price inched forward month-over-month, up 0.1 per cent since May.

Townhomes fell 8.6 per cent to $774,700 and condos dropped 8.9 per cent to $654,700. Both also saw month-over-month drops with townhomes losing 0.6 per cent and condos 1.4 per cent compared to May.

Prices dropped as the area recorded the lowest number of home sales last month than any June in nearly two decades.

The board says 2,077 homes sold in June 2019 — down 14.4 per cent from the same month last year, down 34.7 per cent from the 10-year June sales average and the lowest June total since 2000.

Condos experienced the biggest slow down. In June, sales of condos fell 24.1 per cent compared with a year ago to 941. Meanwhile, townhome sales last month dropped nearly seven per cent and detached home sales fell 2.6 per cent compared with June 2018.

The number of newly listed homes also fell, dropping 10 per cent from June 2018 to 4,751 homes across all categories. However, the total number of homes listed for sale rose 25.3 per cent from June 2018 to 14,968 homes in June 2019.

The sales-to-active-listings ratio, a key measure that indicates whether it’s a buyers’ or sellers’ market, was 13.9 per cent for all property types in June. It dropped to 11.4 per cent for just detached homes, but rose to 15.8 per cent for townhomes and 15.7 per cent for condos.

A ratio under 12 per cent for a sustained period suggested downward pressure on home prices will occur, while upward pressure is expected when the ratio exceeds 20 per cent for several months.

“Home buyers haven’t had this much selection to choose from in five years,” said Smith, adding sellers need to price their homes accordingly to be successful in the current market.