Two weeks ago the Bank of Canada raised the policy rate by 25 basis points, surprising most as underlying inflation remains stubbornly high.
James and Denny share how the rate increase has affected current home prices in Greater Vancouver and what they are seeing day to day as realtors.
This episode will focus on the current rate hike and how it has affected the Vancouver real estate market, the dominant seller’s market, people not listing properties, multiple offers, the active luxury market, the rise of construction prices, and current activity in New West, East Van, North Van, Langley, Port Moody and Coquitlam.
Read the Transcript Here
Hi everyone, I’m James Garbutt. And I’m Denny Dumas. And this is the Garbutt Dumas Real Estate Podcast.
Denny: June 21, 2023. We had another interest rate hike two weeks ago. Bank of Canada increased the rate 0.25% Which, in return, gets the banks to increase their prime rate. So prime is now sitting at 6.95. And I don’t know how you feel Jamie but I think I’d like to start with an apology to our listeners. We made a lot of predictions coming into this year.
James: Yeah, we did.
Denny: If we made a lot of predictions, March, April, May, June of 2022, talking about where we think interest rates are gonna go. And hindsight’s 20/20. We’ll admit that.
James: We’re not shuffling anyway. We’re not predicting financial…
Denny: But actual predicting of the rates but at the same time, if you told me in March 2022, and I can’t remember exactly what was prime 2.4% 2.7% something in that range? 2.7% maybe? If you told me Prime was gonna go up to 6.95% I would have thought we would have a serious problem with Greater Vancouver real estate.
James: I think over the last decade, I’ve said multiple times if rates get back up to like 5%- 6% the sky’s gonna fall. And I do believe over, you keep rates high, the sky will start falling more and more, year over year. Clearly, the market or most people can handle this blow. Even if the payments are high and painful. There’s enough equity out there for the most, but that’s just what we’ve seen over the last say three to six months looking backwards.
James: We look forward over the next three to six months, might start seeing more distressed sales start popping up. I mean, that’s, that’s kind of the main metric that I look for.
Denny: Yeah. I mean, it’s definitely affecting Greater Vancouver real estate, but I don’t think it’s affecting real estate in the way that we assumed it would. Like if you asked us these questions 12 months ago, I think we would have said market values will be down, activity will be down, listings will be sitting and none of those things are true. So yes, interest rates are affecting Greater Vancouver real estate but not in the way that we thought.
It’s affecting real estate in the way that people are just not listing homes for sale. People are sitting on the sidelines saying “I’ll wait till peak pricing comes back”. And to be very honest, we’re going to talk about this in the next podcast, but we’re not far off that and in some neighborhoods, we’re above that.
Denny: It’s a, it really sheds light to me and then we talk about this often on the podcast that: what is our number one problem in Greater Vancouver real estate? It is we do not have enough supply for how many people want to live throughout Greater Vancouver. And this is just shedding more light on it.
We have a serious problem in Greater Vancouver where there is not enough doors for people that want to live here. And all of these stats that we’re going to share throughout the next couple episodes, this market update and then we have a pretty awesome one coming up so stay tuned for that one, of comparing prices throughout Greater Vancouver real estate from 2016 to through COVID to today’s prices. So that actually even as a real estate professional who does this every single day I was a little bit surprised by stats that I found even in just doing some of the research.
Denny: But I think quickly just share your thoughts on supply and like how surprising it is with the rates going up four and a half or you know whatever the exact number is now four and a half percent in the last 12 months of how little it’s affecting price points.
James: You know, I mean, the supply is pinched, there’s no doubt about it and I think that I don’t know when the next world is going to exist in Greater Vancouver real estate. We’re gonna see across all property types in most cities, say a sales ratio consistently below 20% meaning like, lots of listings, low percentage of sales going through. It just seems so far from what we’ve seen for years. And maybe that time will come but right now like you said, the bank prime rate that’s prevailing out there is 6.95%.
We miss-predicted that one. We shouldn’t be predicting bank rates anyway but but we miss-predicted that one but I think the biggest shock for me is not just that the rate is that high and that it’s been this long. I mean, it was expected that it’d be up there for a while but not just that the rates is high. But if you look at the, the data, the number of multiple offers happening, the sales ratio happening, the data when you look at the last 30 to 90 days, shows a very strong seller’s market, and it shows prices holding.
So not just the fact that rate is this high. But the data is that good in favor of the sellers in this environment, and that’s the biggest shot we’re gonna get into it because some of these areas and some of these product types are just outrageous.
Denny: Do you want to start with a few headlines? Or do you want to start with some sales ratios in different areas?
James: I think we should get into the headlines but let’s just go with like the just the macro what the real estate board put out there for May you know, and the first few days of June 2 they released the May stats and then that’s history today but it’s I think it’s good because the highlights that I got from that May stat release was that this was six consecutive months of price increases. So from call it, December to May, prices have been going up. May sales were 15.7% higher than May of last year. So the sales volume was higher than last year. It’s still below the 10 year average but just barely at 1.4% below.
Denny: To put that in perspective, let’s just make sure we know is interest rates started climbing at the end of March 2022. So May is, May was maybe the first slowdown month last year so it’s not surprising to me that after two bank rate holds early this year, May sales activity was greater than last year by 15%.
James: If we looked at March 2022, it was a very active month, May 2022. It was the market was already transitioning. So we’re I mean for the first time in months or a while, I don’t know. I’d have to go back to see how long but we’re actually beating last year sales in terms of volume.
And I think if you look at January to April, I think last year sales outweighed the volume from this year. But the, our sales were 15.7% higher in terms of volume and our listings were down 10.5% compared to last May.
So I think that gives you a little bit of a clue on the macro Greater Vancouver that listings are down, sales are up. That kind of explains some of the prices and some of the bidding wars. What we’re seeing other highlights to sales ratio across all property types was 38.5%. That means that you know if there was 100 listings in the month of May 38.5 of them sold in that month. Detached homes were the lowest at 28.5% sales ratio. Apartments were 45.5% and townhouses were 45%.
And when a sales ratio like let’s call it when a sales ratio is above 20%, for sustained time, they call that a seller’s market with upward trending prices. So 20 listings out of 100 listings sell in a given month. That’s base of a seller’s market and across we have 28.5 for houses 45.5 and 45 for apartments and townhouses. So strong seller’s market, statistically,
Denny: It’s actually, I’m looking at all the stats that I pulled up here, but it’s actually slightly confusing but interesting that overall May had more sales than last year. When you look at like really specific market segments and types of properties. A lot of them were down. So I look at it like New West condos. May of 2020. Sorry, this is year to date, though. Sorry, that’s why I’m getting confused. So May was the first month where we saw increased sales volume comparatively to last year. But if you look at 2023 as a whole compared to the first half of 2022 sales volume down significantly.
James: You know you’re not wrong. I think it just shows that that first four months of last year was so strong in terms of volume.
James: But the May, I happen to have the stats but the May condo sales in New West were 94 this year, 85 last year. I mean we’re gonna go we’re gonna go area by area here, we’re not let’s not get ahead of ourselves. But I mean we’re, I think May is the first month of this year where I can’t remember April but I believe May is the first month of this year where it had more volume than last year as a whole. Now, you’ll go into different areas and it’s gonna show you a little bit of a different story because yeah, I mean, this depends on how big of a sample you look at.
Denny: Some and keep in mind, May was coming off two rate hike holds and June 7, they increase the rate 8.25%. So do you think that trend declines moving through the summer? As people see, you know, there might be the, I mean the talk of being around rates wow, again, we’re not making predictions, we’ve learned our lesson. But the talk, the experts are saying there might be another hike either in July or in the fall.
James: I think June data should reflect May data. Similarly, like I think June will be below the 10 year average or close to it. And it will probably be more sales than last June and less listings than last June is my guess.
That being said, I think we’re in a time right now where some of the market is holding on to a pre approval of a mortgage rate that no longer exists. Among a lot of mortgage brokers, email chains, and I’ve noticed that the five year fixed has gone up in the last month and I think the right now I think the best posted rate that was emailed to me was a call it just over 5% Maybe it’s 5.05% or 5.1%. And then that’s up basically half percent from the bottom of what I saw say, a month ago.
James: So people that have a pre approval and have 120 day rate hold are in a window where they may have 60 to 90 days left to buy at that rate and if they don’t buy that rate, then the mortgage goes up half a percent. So that could be part of the market. But I also just think there’s just a lot of people that want to move and when the right house comes up, they go for it.
It’s not opportunistic, investor type buyers that are driving this market of people that want a place to live or want more space. I mean, we’ve been in a few homes lately, and it does not look like I mean, I was in one in North Vancouver over the weekend. And the agent said over the weekend, it was listed for $2.6 million and over the weekend they had 100 people through the door. So a good house, even if it has a higher price point, gets a ton of action.
Denny: It is, it is crazy. Like one of the things I wrote down coming into looking into all these stats in the last couple days was and this is just like a gut feeling based on what we’re seeing day to day with clients is that square footage is hot. People are upsizing the larger 1990s townhomes. We had one in North Van last week that set a record in the complex, highest sale ever in the complex and in a 6.95 interest rate environment. This is after the rate hike. Highest sale ever in a complex. But and if you look next door there’s a complex that is newer but smaller and no attached garage, underground parking and that condo or that townhouse complex is not seeing the same activity as as this 1990s larger with detached area with attached garages seeing.
And then I’ve had some clients looking at like two to 3 million homes in Coquitlam and a lot of them are selling with multiple offers subject free in week one. And same thing in North Van that someone looked at something that was listed $2.9 last week that’s getting multiple offers today. It’s a bit strange, but have we ever seen luxury this active? Like this $3 million price point.
James: $3 million seems more normal than it did years ago. You know $3 million, $2 million is an older home in a lot of these markets and $3 million is the base of a newer home that’s say smaller, well it’s not smaller like a 3000 square foot newer home. Well North Vancouver but I mean North Vancouver $3 million newer homes. I mean, a lot of the newer homes are $4 million and up.
Coquitlam is the, Coquitlam has a great supply of detached homes. Usually there’s a good selection but I imagine there’s a difference between a poorly designed, poorly built $3 million home and one that’s well designed and the one that’s well designed is getting all the action and the one that’s poorly designed is probably struggling on market.
James: Yeah. Quality Matters. Spend time on a designer. Spend time on a home designer if you’re spending a million dollars on building a house or more, spend five to 10 minimum on a designer. Anyways, that’s just some wisdom.
Yes, you’re absolutely right on the price point. Just touching on supply. This might sound a little redundant to anyone that follows real estate podcasts in the market but the supply is a constant struggle and a constant discussion point and Bank of real estate. I don’t see any sort of light at the end of the tunnel that ever there are solutions to it but none of them are easy. David Eby announcing no more single family zoning is a step in the right direction. Having cities implement that, that’s another question. I’ll believe it when I see it in some cities.
New construction I listened to a podcast this week. It was an interesting note from a new development marketer that if he got the land for free and let’s just use Burnaby/Brentwood as a market as an, as an area if the land was free, they need to sell the condos at $1,000 bucks a foot to break even.
So when you look at new supply coming onto the market, it needs to get called it on average $1,200 plus a foot and a lot of these like, say Burnaby in order to make money. So the new supply that will likely hit won’t compete with the price points of existing supply. There’ll be smaller and more expensive and so that will keep the condo market pinched or at least the new supply of condos coming in a little bit more expensive and not able to compete with resale.
And then for townhouses you and I both know and anyone that kind of watches the market that they’re not making enough of them. Like if you’re looking at New West, Burnaby or Tri Cities, there’s just not enough new townhouse developments going on.
And single family homes. They’re really not making more of them. You know, there’s maybe a few lots, pop up every year, a few subdivisions happen. So houses will be pinched for supply. They can’t make more of them. Townhouses, duplexes, well, they might make some progress, but it’s going to lag behind them and lag behind demand. And then new condos are expensive, you know, call it $1,200 foot plus.
Denny: The first headline I wrote down that I found was Vancouver sees big dip in construction of new homes. And what that’s talking about is a lot of developers are sitting on the sidelines or putting projects on hold right now because of the interest rate costs. Like Jamie just mentioned, they need to sell a condo for $1,000 bucks a square foot to break even without including the land
James: Because I got the land for free!
Denny: So a lot of them, the price point of where they’re going to sell a project if they launched it today is not going to justify the two years and costs involved in putting that project together. So a lot of them are putting projects on hold which, guess what? Further increases the problem of supply.
James: So what like what I see unraveling, what anyone would see unraveling is you have all these projects that are on hold that are, that are not watching because the they don’t make sense. And I heard that Anthem’s being a little more aggressive this time. They’re going right through now but a lot of developers just don’t want to. They want to time that launch, they wanted to hit and right now is arguably, feels like it could be a bottom of the pre-sale new construction market. I think it could be there could be, to get a little ugly over the next six months before the lights start showing. So right in between now to the end of the year could be a good opportunity for pre-sales because the incentives are starting to hit our inbox more and more these days.
But yet there’s a lot of so right now, high rates, which is holding a lot of projects back. I imagine developers are gonna love them. We’re gonna think like connect spring if there’s market momentum and rates come down a little bit or ease up. There could be a lot of enthusiasm for projects. A lot of project launches could happen at the same time, same time. Now a lot of construction starts could happen at the same time.
So even though now it’s expensive to build because of high interest rates. It could be more expensive to build in two years when rates come down but the cost of labor and trades go up because the demand.
James: There’s gonna be an absolute rush in construction at some point and I do feel there’s going to be a whole nother demand side or struggle to get the units built that need to be built. Construction costs will probably go up out of this. And I think prices will probably follow.
Denny:One of the big headlines, probably first three or four months of the year. It was very, very negative around real estate and one of the big things was sales volume down significantly. They’re throwing around numbers like 30, 40 50% down. This was actually true, but the way that they were presenting it to people was a bit misleading.
The real problem was there just wasn’t enough listings for sale, sales and we’re going to share some of this and if you don’t like stats I promise we’re gonna make this super super interesting. But the sales to active listing ratios are super high. Jamie mentioned early in the early, in the podcast 20% is where, above 20% is where you see the term seller’s market. And a lot of these like I’m looking at are 40% and above. And when was the last time we saw that? Probably really middle of 2021 like when we saw the craziness. 2017 we probably saw numbers like this, but it’s been a little while and I wanted to share some numbers of like of these actual sales volume.
So what is happening right now. So comparing January 1 to the beginning of June for New West single family homes were down 32% In terms of sales volume, which means again, there just is not a lot coming for sale. New West condos, down 36% sales volume from January to June.
North Van house look a little bit better, were 21% down. North Van houses 34% down. Port Moody condos are the only one I could find that actually has increased in sales volume comparatively to 2022. So there’s been…
James: I think there’s randomness, just randomness.
Denny: Totally. But the majority of them are anywhere between, like North Van homes, single family homes were the were the lowest at 21%. And but the majority of them are between 25 and 40% declined.
Port Moody townhomes 33% less sales than 2022. Again, the supply there just is not a lot. Most properties that are listing correctly in the rate and range of list price are selling in a week. And above list price. Just there’s not a lot of them for sale.
James: I think what, just touching on because we’re gonna go over different neighborhoods in different cities here in a moment and just touch on the stats and what they mean to us because there’s, if you look at one stat it’s not telling you the whole picture. You’re talking about sales volume. When you look at the number of sales in May versus June or year to date versus last year. It gives us an indication of how active the market is in terms of transactions, doesn’t it?
You can, you can have a lot of sales in the market could be a seller’s market or a buyers market. It depends on the sales ratio or the the other two things that we look at the sales ratio, which is the number of listings selling in a given month compared to how many are listed.
So if two out of, if there’s 10 listings on market for, let’s call it there’s, 10 listings for houses as a New West right now, live, and last month, two of them sold. That gives you an approximate sales ratio of 20%. So the sales ratio gives us a good indication of how much of the inventory is actually selling. The, it’s a pretty good indicator but it’s also good to marry it up with other things. So if you look at that alone, and you can get skewed data in some markets, you know, there are markets like Anmore where there’s a lot of high end homes, and they often have a low sales ratio where a smaller percentage of them sell in a given month. But it doesn’t mean that the market is downward trending there, it just means that there’s a lot of luxury homes in a market where there’s not enough demand for those luxury homes.
And so we look at the sales ratio, we look at the sales volume that gives us the activity, the sales ratio gives us the sell through, but they can still be a little bit, sales ratio doesn’t always give you 100% confidence and to back it up a stat that I like to look at and Denny looks at as well as just when you look at the last 10 sales or last 30 days of sales or last 100 sales, how many of them went in multiple offers? How many of them went for full price or above full price? And that gives us a good indication of well if you look at the last 20 sales for houses in New West and 10 of them sold above list that was 10 over 50% multiple offers means that the good products that come on the market are getting a lot of demand.
So if the sales ratio was low for houses in New West say it was 10% or 15%. But the 50% of the sales that are happening are getting multiple offers. That just tells me that there’s a lot of dog product on the market, a lot of listings that are, that are just not desirable. But when a good house comes up, it’s very desirable.
So let’s go into it. Like what did you find Denny?What did you find? What are you seeing out there?
Denny: Do you want to start low or high?
James: Lets, let’s, whatever floats your boat.
Denny: Ok, let’s start low because I think high is gonna surprise you.
Coquitlam single family homes above $2 million in May there’s 25 sales. There’s currently 119 active listings. So that is a 21% sales ratio. Out of the 25 sales, 11 sold at or above list price. That’s just shy of 50% What’s that 40-45%
James: 11 out of 20?
Denny: 11 out of 25.
James: Oh, oh, yeah, that’s pretty strong.
Denny: But that is the low end of sales ratio that I could find
James: That is above 2 million in Coquitlam. So just to put that in perspective, you get a lot of dreamers above 2 million. When you have an open, open list price range. There are a lot of products that are priced at 3 million $4 million dollars that have virtually no buyers for them. So 21% sales ratio for a high end price point in Coquitlam. That’s pretty strong. If you went from 2 million to 3 million and capped it, it would be even higher sales ratio.
Denny: It would be higher.
James: Did you look at..?
Denny: Do you want to see the high?
Denny: I kind of looked at everything. So I’ve got North Van houses. I’ve got Maple Ridge single families at a 29% sales ratio. Langley one bedroom condo, something that I was expecting to be a little slower, more inventory. Are people moving out to Langley for more space right now? But apparently people are moving to Langley for one bedroom condo. 50 sales in May of one bedroom condo in Langley. There’s currently 51 active listings.
Denny: So the ratio is essentially 100%.
James: There was a time 5-10 years ago where not just Langley even in New West and Tri Cities. There was, when the market would slow and condos were slow. One bedrooms were slower. You know the thought was if you’re moving from Vancouver to New West or moving from Vancouver to Coquitlam, you want a two bedroom. You’re going for more space.
James: Now Langley, even further east. One bedrooms are, have an incredible sell through rate.
Denny: So 50 sales, 22 of them sold at or above less price.
Denny: Median days on market, 9. And then you go like…
James: I think the message there is first time buyers, lower price point, strong demand, people want to own a home.
Denny: Totall. Investment wise too, SkyTrain is going out there. I think a lot of people are picking up condos as rental properties. And then Langley is, Langley, Maple Ridge were very similar. Through COVID saw these huge spikes in market values. And as interest rates started climbing last year they had a really slow second half of the year but they’ve bounced back significantly.
Look at Langley townhomes in May, there’s 112 sales. 112. That’s pretty good. 133 active listening. That’s an 84% sales ratio. Median days on market 7. 84 of the 112 sold at or above list price. That’s 75% selling at or above list price.
James: You know, when my comment was about they’re not making enough townhouses Langley is making was one of the exceptions. Well, maybe not enough, clearly based on the sales ratio. But Langley is one of the markets where if you’re looking for a townhouse, consider it because they make a lot of them out there. That’s, those are strong seller stats.
James: How about I throw up a market here. We had a recent sale in Mount Pleasant and I thought let’s use this as an opportunity to look at the East Van condo market.
So Mount Pleasant is a desirable neighborhood in East Van and it’s doing pretty well, like not as well compared to those Langley stats. But in the last 30 days in Mount Pleasant 39% of the listings or condo listings sold above the list price. So 12 out of the 31 sales were above list. The average sale price, list price was 101.2% average or median days on market was eight.
And I guess in May 2023, this year there was 50 sales in Mount Pleasant and when you compare that to previous years, that’s above last year 2022 at 45 in the same month, and below 2021, which had 61.
So the, it’s not an extreme of anything. I think this is the data of Mount Pleasant condos, when I look at it seems to be pretty close to the average of what we would see in most markets around Greater Vancouver, some are doing better, some are doing worse.
When I go further out to East Van and not just kind of picking Mount Pleasant on its own. The sales ratio of East Van condos in May was 42%. So there’s 165 sales out of 391 listings for the month of May for East Van condos. Average sale price list price was 100.5%. So on average, they sold above the list price, and about 40% of them sold over the asking price.
Not too bad. I mean pretty strong data. It’s and this just shows the anomalies, you know when you look at Mount Pleasant, there was more sales in May than then last May but when you look at East Van, there was less sales in May than last May. So that means that it just means the sample is not big enough.
But I would say May to May for East Van condos is pretty similar, you know 165 sales this year, 177 last year. 237 in 2021. So East Van condos, strong and steady represent pretty typical market in this market.
James: You got another area?
Denny: North Van houses are interesting. So I’ve had a few clients looking at 2 million it’s kind of two to $3 million range in North Van houses. And so I looked at 2 Million and above.
So in May there’s 63 sales of homes 2 million or above. There’s currently 152 active listings, that’s a 41% sales ratio. Median days on market 835 of the 63, so over 50% sold at or above list price.
James: North Van housing market is hot. This is for detached homes?
James: Just to help, I looked it up, median sale price in May for North Van home was $2.2 million and that gets you about like a 1970s home that’s 2500 square feet on two levels. That’s partially updated on a quiet street. You know it’s $2.2 isn’t what it used to be in North Vay.
We’re gonna get into a podcast that compares 2016 prices to 2020 when COVID hit to today, and North van is one of the higher performing markets in that analysis. So but yeah, a house in North Van.
Denny: Where do we go from here? What is the second half of the year look like? We’ve seen one more interest rate increase, there may be one more. What does the second half look like? Is there more supply? Do these sales ratios look the same in the second half of 2023?
James: I think that the sales ratios are going to be similar. I think the supply is going to be lower. I think the sales are going to be lower if I were to guess. Originally you know, there is a scenario where September October could be busy. But I think just in a high rate environment especially if there’s this uncertainty of maybe one more hike. I could see the Fall just being low inventory, low sales, but the ones that do come on the market perform well. That’s my broad prediction.
I have another you know, I looked at New West, so just a quick market update for New West. Condos in New West, on average in the month of May sold for 101% of the list price, median days on market was 8. 94 sales and currently 146 active listings. That’s a sales ratio of 64%. Strong sales ratio for condos in New West.
More sales in 2023 May than there was in 2022 May. 94 sales this year. 85 last year. And if you go back two years 132, And in the month of May 49% of the condos sold in New Westminster went above the list price.
And just like broadly speaking, because we sent out a flyer last week, detached homes and condos in New West in the month of May, both of them were about half of the sales went over asking. So they, half of the stuff selling is getting multiple offers pretty. Pretty strong market.
Denny: Seems like the majority of neighborhoods are roughly at that half range. Half are selling above. Apparently except Langley.
James: Yeah, Langley’s doing well. Langley’s doing well. I kind of also wanted to look at townhouses and I didn’t want to be specific on one city because, you know, if you look at New West townhouses, there’s not many of them, and it might be skewed data. So I looked at townhouses going in New West, Burnaby and Coquitlam, kind of a broad area and in May, average sale price to list price was 101%. So on average, the listing sold 1% above list, eight days on market median. More sales 165 sales in May have noticed 126 sales in May of 2023. Of those sales 50% of them went over asking and about another 10% went full price. So full price and over asking represent about 60% of the townhouse sales in New West, Burnaby, Coquitlam. And that was for the month of May. Pretty strong, pretty strong market there.
Denny: It’s a good time to have a townhouse listing.
James: Listen, it found one dog in the trying to find what’s not selling what’s, what’s lagging and not I mean, I don’t think the land category in the MLS is usually some hokey listings, but the lands in Burnaby, New West, Coquitlam, Tri Cities, PoCo, Port Moody, five sales in May, 45 listings live, sales ratio of 11.1%.
The sale price to list price average was 86%. So a small percentage of the land listings sold in May. On average, they sold for 86% of the list price, landless very skewed data, very small sample size, land listings can be a bit weird.
Denny: That’s vacant land?
James: That’s vacant.
Denny: Yeah, it’s really hard to get a stat for like land value properties because they’re looped into detached and single family. So but I think if we had that, the numbers would not look as good as this. It seems like this slower moving products are the original condition homes that need work, like throughout Greater Vancouver.
James: I should acknowledge that this is, listings that are advertised as land could be raw land, could be a house that’s condemned. If you took data out of houses that were in real rough shape, but there is an existing structure on them, but they’re the lowest price points of detached homes in their markets. That is probably pretty strong because usually the lower price when even if usually an ugly house that smells bad but has good bones and a good layout. If you get a $1.3 or $1.4 million detached home in Burnaby, it’s probably ugly, it’s probably deemed the land value, but it probably would sell relatively well in this market because there’s you know, it’s it’s a price point that’s gets someone out of a strata. It’s the house.
Anyways, Denny. Anything else to share on the data you’ve seen for May?
Denny: I feel like we’ve confused people a little bit but also provided a ton of information.
No, I’d say my overall summary and thoughts is the market is more impressive and resilient than anticipated. And we have seen that through the all the data that we’ve just shared through the first half of 2023.
James: I think the sales that are happening are doing well. I think in the remainder this year, we’re going to continue to see headlines about interest rates causing havoc, we might see more distressed sales show up in the Fall. We’re going to continue to see headlines about renters and the rental market and the demand for them, how strong it is. And when rates are this high and prices high, creates more demand for rentals.
Any other predictions on headlines we might see that aren’t out there today?
Denny: Well speaking of your rental comment there, one of the headlines: “Rents have increased 20% from this time last year”.
20% year over year. That’s pretty bananas. That doesn’t like, that’s not a sustainable growth pattern in anyway.
When you look at a why bedroom condo, they used to be two grand and now it’s $2,500.
James: I saw a headline a Burnaby one bedroom condo that’s listed for $2,400 a month got 180 applications. That was like again, I hope this isn’t clickbait. If it is, they got me. But that was a headline that I saw. So I believe that you know that’s not outrageous. 180 applications, that’s a lot though.
Denny: Yeah, that’s a lot. That seems low. Assume, like assuming this is in a pretty good neighborhood like a Brentwood or Metrotown or something that’s really, really desirable. One bedrooms there, even the small ones that are less than 600 square feet are now $2,800, $2,900 a month. So posting on a $2,400 I think you’re asking for a couple 100 applications.
James: Let’s call it a wrap up Denny. We’re in late June. This is our market update for now. If we can help you in any other way, don’t hesitate to reach out to us. You can get Denny at Denny@GDrealestate.ca or James at James@GDrealestate.ca those are our direct emails. Reach out if you have any questions or we can help in any way, we’d love to hear from you.