Over the last couple of years, there has been more demand than supply for housing in Vancouver, creating frenzy in buying high end homes. Houses were sold fast and frequently at well above asking price. Now that the frenzy has levelled out, housing prices are returning to a more balanced and attainable range.
While the demand for high end homes in Vancouver has changed, other housing options are not seeing the same significant decline in sales.
Sales for other housing types and price ranges have seen a marginal drop in sales. Depending on the time of year, some new condos in Vancouver have even seen an increase in sales. High end condos, for example, increased in sales by 5% in October while townhouses have seen a 4% increase in sales.
When compared to sales of luxury homes, average priced, single-family homes have increased in sales by 2% in October.
There are many factors behind what people are buying in Vancouver.
Inflation and the threat of a national recession has many potential homebuyers reassessing how much debt they’re willing to take on to upsize their property. Adding to the unstable market,interest rates continue to rise, further adding to the price of a luxury home and the discomfort of home buyers.
First time home buyers are more cautious nowadays when it comes to buying a new home. Rather than put all their money into a luxurious new condo in Vancouver, new house hunters are looking at all their real estate options first to protect their savings.
There are other factors affecting the sales of luxury homes in Vancouver as well. As more people return to the office after over two years of remote work, many are finding they have less need for the extra space and in-home perks that were once prioritized to alleviate the isolation during the pandemic.
Gas prices are also affecting house shopping decisions. Now that people are commuting regularly to and from work, they are spending more on gas. As fuel prices rise, would-be home buyers are looking more closely at where their money is going and what they want to spend it on.
With many homebuyers looking for housing options that cut their commuting times and costs down, buying a luxury house with extra amenities and features is becoming less appealing when compared to finding an affordable new homes in Vancouver that is closer to their work.
Adding to the financial constraints of owning a luxury home in today’s economy, house hunters have another reason to want money left over after their mortgage payments. Now that people can travel and enjoy all the fine dining and entertainment experiences Vancouver has to offer, homebuyers want to get out, travel and enjoy the recreational perks of life once again.
These trends aren’t showing any signs of changing. The forecast for 2024 predicts the real estate market will continue in the same direction. While luxury home sales are expected to decline, other housing options will not be dragged down with the high-end housing market slump.
Realty and investment experts predict Vancouver’s average priced condos, single family houses and townhomes will continue to see a more stable market with some increases and dips throughout the year.
Vancouver is one of the largest cities in Canada and one of the most desirable cities to live in globally. While its housing market is the most expensive in the world, current trends are starting to balance out the high real estate prices. While luxury home sales are declining, this is not dragging down Vancouver’s average housing market.
