Vancouver Real Estate: 2022 Condo Sales Down, Prices Up

Rising interest rates have contributed to softer home-buying activity in both the Greater Vancouver real estate market and the Fraser Valley market, according to RE/MAX Canada’s 2022 Canadian Condominium Report. Greater Vancouver saw just over 12,000 strata apartments changing hands during the first eight months of the year, down from 15,060 sales during the same period in 2021. The median price year-to-date, however, has climbed more than seven per cent to $793,466, up from $740,221 one year ago. Meanwhile in Fraser Valley, apartment sales were off last year’s pace by 25.2 per cent in the first eight months of the year, with just over 3,800 units sold compared to more than 5,000 during the same period in 2021. Inventory levels have been rising but in August, apartment listings fell to 1,602 in Greater Vancouver markets, down from 2,158 in August of 2021. The same held true in Fraser Valley in August, when the number of new listings fell 5.3 per cent year-over-year, to 554 units.

First-time buyers have been especially impacted by higher interest rates, with the stress test now sitting at approximately seven per cent. Rapidly escalating rental rates have not helped, flattening any opportunity for renters to save for a down payment. Those who are able to accumulate a down payment and qualify are active in the market, which has pushed up condominium market share year-over-year, with apartment sales now comprising 54.3 per cent of total residential sales in the Greater Vancouver real estate market, up from 48.2 one year ago, and 31.9 per cent in the Fraser Valley, compared to 25.3 per cent in 2021.

Buyers continue to exercise patience, waiting for the right listing to come along. Popular destinations in the Vancouver real estate market include the tri-city area of Port Moody, Port Coquitlam and Coquitlam. Some opportunities exist in markets such as New Westminster, where apartments offer good value for the dollar and a more central location. Those seeking affordability and lifestyle have been attracted to Vancouver East, in communities such as Commercial, Main and Mount Pleasant, where lots of trendy restaurants and shops are popping up. Median price in the area sits at $675,000, up eight per cent over last year. Sales in Vancouver West are also holding steady, down just 12 per cent year-over-year, with more than 3,200 sales reported between January and August of 2022, compared to 3,666 during the same period in 2021. Fraser Valley markets that were sought-after during the pandemic, such as Langley’s Willoughby Heights and Walnut Grove have experienced a decline in demand for condominium apartments. Affordability remains a challenge in Greater Vancouver and the Fraser Valley, but moderating residential values may take some of the sting out of higher mortgage rates. While the Bank of Canada is committed to bringing inflation to its knees, consumer uncertainty is expected to be a factor in the market until the Bank’s objective is achieved, markets stabilize and rates start to decline.

Condominium Trends in the Canadian Real Estate Market

Condominium market share has grown in major urban Canadian real estate markets yet again this year, a reflection of new market realities and the shifting course of entry-level buyers. RE/MAX Canada’s 2022 Canadian Condominium Report examined more than 120 communities in six major markets, including Greater Vancouver/Fraser Valley, Calgary, Edmonton, Greater Toronto, Ottawa and Nova Scotia. The report found that condominium sales were down in the first eight months of 2022 in four markets, including Greater Vancouver/Fraser Valley, Greater Toronto, Ottawa and Nova Scotia, while Calgary and Edmonton reported double-digit sales increases over the same period in 2021. Condo values are up in almost all markets year-over-year, with many bolstered by a robust strong first quarter.

Condominium market share, as a proportion of total Canadian real estate sales, advanced across the board, with upswings reported in five out of six markets analyzed, ranging from a low of 0.08 per cent in Ottawa to a high of 6.6 per cent in the Fraser Valley. Compared to year-to-date levels one year ago, condominiums now represent just over 54 per cent of total residential sales in Greater Vancouver, 36.3 per cent of residential sales in the Greater Toronto Area, almost 32 per cent of sales in the Fraser Valley, just over one in four sales in Edmonton and Ottawa, and almost one in five sales in Calgary. Nova Scotia was the only market to register a decline in condominium market share.

“The affordability factor is the key issue in today’s housing market,” says Christopher Alexander, President, RE/MAX Canada. “Rising interest rates have slowly eroded purchasing power and, despite lower housing values and cooling market conditions, buying a house is more challenging now than ever before. For those who have adjusted expectations with every rate hike, the cost of carrying a mortgage versus renting is now more comparable, given sharp double-digit increases in rental rates throughout the major markets, but especially in BC and Ontario. So, while fewer sales have occurred in 2022, condominiums represented a greater proportion of overall sales, as buyers gravitated to affordable options to achieve home ownership.”