Vancouver is one of the most expensive real estate markets on the planet. It is a highly developed city where land is limited, demand is high, and a combination of a lack of supply, foreign investment, and buyer interest consistently pushes prices past affordability. Vancouver was recently ranked the most unaffordable city in North America by Oxford Economics, and this isn’t breaking news to residents of the city.
As we move from winter to spring, typically, that means a time of heightened buyer activity. People are more likely to not want to go through with the searching and moving process in the winter but, come spring, it is time for a fresh start. If you are one of the people looking for new Vancouver real estate in the spring or are interested in the market’s performance, we’ve got you covered. Here’s a brief rundown of Vancouver’s real estate trends heading into spring.
State of the Market
The Vancouver real estate market has been touted as expensive for quite some time, but the situation is only getting more dramatic. Prices are surging across home types, leading to Vancouver becoming the most expensive market in Canada and one of the most expensive in the world.
According to Wowa.com, the average sales price of a home sold in January 2022 in Vancouver was $1,255,200, which marked a 19% increase year over year from January 2021. The average sales price grew across categories by a whopping amount, with detached homes climbing 24% year over year to $1,953,000, townhouses reaching $1,029,500, a 26% surge, and condominiums hitting $775,700, a 14% increase.
This comes as sales and listings are down. In January 2022, there was a 4% decrease in transactions compared to 2021. The lack of inventory in Vancouver is a real problem, with active listings in the city down 32% in January compared to last year. With lower supply and listings come higher competition and prices.
Prices tend to differ across the city, with some areas experiencing rapid growth. The most astonishing year-over-year increase comes from Maple Ridge, where the average home price is now $1,134,900. This is a 36% increase year-over-year. Still, the city’s most expensive area remains West Vancouver, where the average sales price is $2,605,700.
Luxury Vancouver Real Estate
Because the price of a home in Vancouver is so high, the definition of luxury real estate has to be redefined. In many regions, a luxury home is one sold for over $1 million. But in Vancouver, just about every home is sold for $1 million, so the luxury market has been redefined as homes sold for over $4 million. Even with this more stringent criteria, 2021 marked a banner year for luxury real estate sales.
According to CTV, luxury sales in Vancouver surged throughout 2021, with 410 homes in the area sold for over $4 million. This was an increase of 171% from the number of luxury homes sold in 2020. This was even true when looking at the ultra-luxury real estate market, categorized as homes sold for over $10 million. In 2020, there were 11 of these sales in Vancouver, but in 2021, that number surged 218% to 24.
Luxury homes in Vancouver are flying off the market at a rate that hasn’t been seen before. Whether this is because of increased buyer interest or investor influence is the question. According to the Bank of Canada, as home sales grew and prices increased, home sales by investors had increased the most in the region. However, this report looks primarily at mortgage data, so it isn’t definitive.
Conclusion
Homes in Vancouver have never been particularly affordable. This is the nature of being such a sought-after market that isn’t a massive spread-out city. There isn’t a lot of land to develop in Vancouver, and that means buyers are forced to spend a lot of money to get their hands on new property. In 2021, they were willing to spend more than ever before.
Home prices surged, luxury home sales surged, and the issues with affordability in the city continued to worsen. As we move into the spring of 2022, it is hard to declare that things will get better for buyers. The lack of inventory makes prices likely to rise, and buyers will have to compete more for property. But that is the price you pay to live in a great city like Vancouver.
