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Why Home Prices Are Skyrocketing in Metro Vancouver (2022)

Home Prices Are Skyrocketing (3)

In the last year, home prices in Metro Vancouver have skyrocketed to highs not seen in the past. In 2021 alone, prices rose by 17.3% compared to 2020, even though the previous year’s increment was only 5.6%. 

Experts link the effects of the COVID-19 pandemic as the source for this rapid price surge. The restrictions imposed by the pandemic have led to residents wanting a better home environment. Consequently, residents in the region prioritize owning a home or buying a more spacious home.

Keith Stewart, a Real Estate Board of Greater Vancouver (REBGV) economist, stated, 

“Home has been a focus for residents throughout the pandemic. With low-interest rates, increased household savings, more flexible work arrangements, and higher home prices than ever before, Metro Vancouverites, in record numbers, are assessing their housing needs and options.”

Another reason that experts have associated with the increased home prices is low home sales inventory. Despite a 14.7% rise in home listings during 2021 compared to 2020, this increase is far lower than the region’s tremendous growth in demand for homes. 

Stewart commented,

“While steady, home listing activity didn’t keep pace with the record demand we saw throughout 2021. This imbalance caused residential home prices to rise over the past 12 months,”

REBGV stated that while the total demand for all types of homes supersedes the supply, many residents are disposing of their present homes to purchase bigger homes. Thus the demand is skewed more towards bigger homes. It has resulted in a high price increase for detached homes and townhouses instead of the price increase for apartments.  

According to Stewart, 2022 began with a lower listing inventory than half of what would be optimal to begin the year. Hence those who would like to purchase homes have a limited selection causing aggressive competition for homes on sale.

It results in a continual increase in home prices. The benchmark price for homes in the region rose to $1,255,200 in January 2022 from $1,230,200 recorded in December 2021.

Home Prices Are Skyrocketing (2)

Will Home Prices Reduce in the Future?

The primary concern for those who cannot afford a home at this particular time is whether the home prices will stabilize and start to reduce or the upsurge will continue for some time.

Stewart said. 

“With demand at record levels, residents shouldn’t expect home price growth to relent until there’s a more adequate supply of housing available to purchase.”

On the other hand, downward pressure on home prices favors the buyers when the sales to active listings ratio maintains below 12% for some time. When the ratio exceeds 20% for some months, upward pressure on home prices is observed favoring the sellers.

The sales-to-active-listings ratio for all homes was 51.3% in December 2021 and 40.3% in January 2022. These ratios are far beyond the advised ratio for downward pressure on home prices. It implies that home prices are expected to rise for more months ahead.

The following section will provide you with a detailed breakdown of the trends surrounding home sales measures for Metro Vancouver, focusing on statistics provided by REBGV.

Metro Vancouver Home Sales

Total 2021 Sales

Year-end statistics (2021) for home sales within the region surpassed the best sales record of 42,326 achieved in 2015 by 4%. 

Specifically, residential home sales within the REBGV region reached 43,999 in 2021. This is a 42.2% rise over sales logged in 2020 and 73.6% more than houses retailed in 2019. 

December 2021 Sales

In December 2021, REBGV reports showed 2,688 homes were sold in the region. This was a 13.1% decline compared to 3,093 units sold in December 2020 and a 21.6% decrease compared to sales done in November 2021.  

Detached home sales were at 794 units representing a 22.6% drop from the 1,026 sales in December 2020. Townhouses sold during the month were 430 units which is a 27.5% reduction from the 593 units sold in December 2020. The number of apartments sold was 1,464, indicating a decline of 1.4% from the 1,474 units sold in December 2020. 

January 2022 Sales 

In January 2022, REBGV reported 2,285 residential home sales in Metro Vancouver. These sales represent a 4.4% reduction compared to 2,389 sales noted in January 2021 and a 15% drop from the 2,688 units sold in December 2021. 

The January sales were more than the 10-year January sales average by 25.3%. 

Six hundred twenty-two detached homes were sold during the month, representing a 15.9% decline compared to the 740 detached homes sold in January 2021. The number of townhouses sold reached 348, indicating a 23.3% drop from 454 townhouses sold in January 2021. Apartment home sales were at 1,315, a 10% rise from the 1,195 sales done in January 2021.

Metro Vancouver Home Prices

Metro Vancouver Home Prices

Overall Benchmark Prices 

December 2021

According to REBGV, the benchmark price for all residential homes in Metro Vancouver was pegged at $1,230,200. This indicates a 17.3% rise compared to December 2020. 

Most impacts were observed in suburban areas covered by REBGV. Homes within Maple Ridge rose by 34.7%, Pitt Meadows at 29.8%, and Whistler at 27.8%. 

In Vancouver Westside, the benchmark price increased to $1.385 million, representing a rise of 10.8% in one year. While for homes in Vancouver Eastside, the benchmark price rose to $1.248 million, which is a 12.2% rise in one year.

January 2022

At the end of January, REBGV reported that the overall benchmark price for residential homes in Metro Vancouver is $1,255,200. This signifies an 18.5% rise compared to January 2021 and a 2% rise over the price in December 2021.

Benchmark Prices by Type

December 2021

In December 2021, detached homes were retailing at a benchmark price of $1,910,200, whereas townhouses were selling at $1,004,900. Both displayed a 22% rise over December 2020 prices. In contrast, apartment homes had a benchmark price of $761,800. This reflected the least price increase of 12.8% compared to the December 2020 price.  

In Pitt Meadows and Maple Ridge, detached homes realized the highest benchmark price increase of 42.2% and 38.5%, respectively. At the same time, townhouses in Maple Ridge rose by 35.2%.

Within Vancouver Westside, the benchmark price for single-family detached homes was $3.434 million, an 8.6% rise from the previous year. Townhouses were selling at an average of $1.308 million, signifying a 14.5% increase in one year. A slower price creep was observed for apartment homes. The benchmark price went up by only 11% to reach $843,000.

In the Vancouver Eastside, single-family detached homes had a benchmark price of $1.77 million, indicating a 14.5% rise in one year. However, the price for townhouses was $1.086 million, which is a 21% rise compared to the previous year. Apartment homes had a benchmark price of $648,000, rising by 8.8% in one year. 

January 2022

In January 2022, detached homes had a benchmark price of $1,953,000. This is an increase of 22.7% compared to January 2021 and a 2.2% rise from the price in December 2021.

The benchmark price of townhouses was $1,029,500. This showed a 24.3% rise compared to January 2021 and a 2.5% rise from the price in December 2021.

Apartments had a benchmark price of $775,700. The price indicates a 14% rise compared to January 2021 and a 1.8% rise compared to the home price in December 2021. 

Home Listings

Home Listings

Total Number of Home Listing

The total number of home listings noted by REBGV in 2021 accumulated to 62,265 units. This reflects a 14.7% rise compared to 54,305 units listed in 2020 and a 19.9% upswing from 51,918 units listed in 2019. Moreover, the 2021 listings total was 11% greater than the 10-year average.

December 2021 Home Listings

 In December 2021, only 1,945 units were newly listed for sale. This represents a 19% cut from the 2,409 homes newly listed for sale in December 2020 and a 51% reduction from the 3,964 homes newly listed for sale in November 2021.

This month, Metro Vancouver experienced the lowest number of home sales listings in over 30 years. Only 5,236 homes were listed, representing a 38.7% decline from the 8,538 homes listed in December 2020 and a 26.7% drop from the 7,144 homes listed in November 2021.

January 2022 Home Listings

In January 2022, 4,170 homes were newly listed for sale in Metro Vancouver. The number signified a 6.9% drop from the 4,480 units listed in January 2021 and a 114.4% rise from December 2021.

The total number of homes listed for sale in Metro Vancouver reached 5,663. This represented a 31.8% drop from 8,306 homes listed in January 2021 and an 8.2% rise from 5,236 homes listed in December 2021.

Sales to Active Listings

December 2021 Sales to Active Listings

The sales-to-active-listings ratio for all types of homes in Metro Vancouver for December 2021 is 51.3%. By looking at property type, detached homes had a ratio of 35.1%, townhomes were at 75.6%, and 60.8% for apartments.

January 2022 Sales to Active Listings

The overall sales-to-active listings ratio for all property types in January 2022 is 40.3%. When looking at each property type, the ratio is 28% for detached homes, 51.6% for townhomes, and 49.7% for apartments. 

For more information about the Vancouver housing market, reach out to Kim Lee PREC*, the top Vancouver realtor.