The June sales numbers are worse than May’s but better than April’s. The sales volume for June was 34.7% below the 10-year June sales average. The sales-to-active listing ratios are 11.4% for detached homes, 15.8% for townhomes and 15.7% for apartments. Prices continue to drop for apartments and townhomes. The monthly price decreased based on the benchmark price is 1.4% and 0.6% respectively. Detached home prices were the first to drop and maybe the first to stop. Its benchmark price increased 0.1% in June. Is this the bottom? My guess is that the large rapid price drop is over, but the price will remain weak and slowly falling. Over the last 12-month period the price drops were 10.9% for detached homes, 8.9% for apartments and 8.6% for townhouses.
New listings in June are 10% below last year and 18.9% below May 2019. Seems like sellers who do not need to sell are taking a break. Inventory is 25.3% more than June 2018, so there is still a lot of competition.
The summer months are usually slow. I see no catalyst that would spark the market in the next couple of months. There have been talks about the unrest in Hong Kong being the reason many Canadians would come back to Vancouver. That maybe the case, but it is too early to tell. However, if they do come back, they will be Canadians looking for a good deal. Not the ultra rich foreigners or money launderers who’ll pay any price to secure a purchase.
The Canadian economy still shows strong employment and wage growth. This is a healthy sign for the real estate market. This means Canadians who have homes should be able to continue to make payments. However, it doesn’t change the fact that properties are priced out of the range for a lot of working Canadians. And without an influx of foreign money, we are waiting for the Canadian wages to catch up to these prices. As a result, activities should remain low and prices weak.
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