Realtor Q&A: Why 2022 is the 'condo year' in Metro Vancouver

The Vancouver skyline is pictured from the air at sunset. (Pete Cline / CTV News Vancouver)

As Metro Vancouver's real estate market continues to grow, so does the demand for condominiums.

A local real estate agency is calling 2022 "the condo year," after condominiums saw a sales-to-active listings ratio of 38.1 per cent last month.

According to faithwilson | Christie's International Real Estate, apartments in Metro Vancouver were on the market for an average of just 16 days, with a benchmark price of $779,700.

CTV News spoke to a Realtor about what would-be buyers and sellers should know.

Question: Why is 2022 being called the year of condos?

Answer from James Hau, real estate advisor: Even as early as 2021, we started to see a major change within the condo sector.

In the beginning of 2020, outside of downtown Vancouver's west side, it was relatively lackluster in regards to the condo market in the suburbs. But from 2021, we started to see a steady increase in not only absorption rates, but also in values. And since December of 2021, up until the end of May, we've seen a massive increase in price at a very rapid rate.

We're talking about January 2020 up until May 2022. There was a 25.17 per cent increase in value for the condo sector in Greater Vancouver. But what's more significant is the fact that from December of 2021, up until May of this year, there has been an 11.14 per cent increase. So within such a short span, you can see that values have come up quite rapidly throughout Greater Vancouver.

Question: What trends are you seeing in downtown Vancouver's west side that are different than other parts of Metro Vancouver?

Answer: The rate of growth is quite different. Downtown Vancouver's west side was the first neighbourhood for condos in Greater Vancouver to really come into a very robust seller's market.

So in terms of overall pricing, they've really gone past a lot of their historical thresholds in terms of price. Inventory is also coming up for that sector in that specific marketplace. And now with interest rate increases, there's a lot of consumers that are really deviating to alternative options and the suburbs are a great opportunity for them to find this.

Question: Why are more buyers opting for the condo lifestyle as opposed to single-family offerings?

Answer: The price definitely has something to do with it, for sure. We've really noticed a trickling down effect for general consumers as a whole now that interest rates have come up.

So apart from the fact that in downtown Vancouver's west side, the condos are already more expensive. Now, with interest rates coming up, people are looking for alternatives that are going to make more sense to them. They could get a lot more product for the same price in Burnaby or Richmond. I think overall consumer sentiment is getting quite positive in regards to condo spaces.

Because of what's happening within the financial markets, it's not as common to see subject-free offers as you did even before February. At that time it's a lot easier to get cash offers for listings. But at this point, typically when we are looking at, let's say condos, we do still see cash offers.

And that's because there is a big population of baby boomers. In fact, that's the biggest population we have in Canada and they're looking to downsize. Many of these people have already sold maybe a townhome, a duplex or detached house, which has risen significantly over the years, despite the changes within the last few months. And they're looking to downsize into something they can live out the rest of their days.

So if it comes to competition, if it comes up having leverage, these type of buyers certainly have it. They have the cash to get the perfect home for them. But also interestingly enough, we've also see a major number of former tenants that are entering into the condo space.

Question: What trends have you seen emerging in the luxury real estate market?

Answer: Because of price differences from what you get in downtown Vancouver's west side, not only for townhomes or duplexes, but also for higher-end condos, we've noticed a lot of consumers really gravitating towards Burnaby and Richmond's luxury condo sector.

We're starting to see a lot of properties that are within the premium range within those respective cities, really start to hit new historic highs and this is relatively recent, just within the last month to two, and it hasn't really stopped. For the same price of what you would get for an older townhome, you could have a luxury condo in one of the best neighborhoods within Richmond and Burnaby. So those values are still rising right now.

Question: What is the most important thing buyers and sellers should be aware of right now?

Answer: I feel as though something that's crucial for consumers right now is to really start off with a general understanding of overall market trends, but also hone in on a more granular level for the specific kinds of products and neighborhoods that are going to be relevant to you.

Because at this point, we're really in what we call a divergent marketplace, which means despite being able to generalize what's happening for Greater Vancouver, if you go to specific price tiers and specific neighborhoods, you'll see they have their own micro markets. So it's extremely important and imperative for you to be aware of what's trending in that space.