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Where are housing prices headed?
VANCOUVER -- A new house price survey by Royal LePage shows that prices are on a downward trend. Some areas, like Vancouver and Victoria, have seen prices increase slightly, but overall they are down in the first quarter of 2020.
The report found the aggregate house price in Metro Vancouver had decreased 2.1 per cent in the first quarter of this year to an average price of $1,083,166, while nationally the aggregate price was up 4.4 per cent.
This comes on the heels of an RBC forecast last month that predicted residential estate sales would be down 30 per cent to a 20-year low because of COVID-19.
“The longer this goes on the more of a negative impact it’s going to have to the overall economy and, naturally, to real estate,” said Vancouver realtor Adil Dinani, who just listed a 1,500 square foot home in East Vancouver.
Broken out by housing type, the median price of a two-storey home in the Metro Vancouver area decreased 1.1 per cent year-over-year to $1,402,395, while the median price of a condominium and bungalow decreased 2.5 per cent and 4.2 per cent to $636,012 and $1,182,420, respectively.
However, prices in some areas have not been as hard hit as others in the first quarter.
The changes in 2020 Q1 prices, year-over-year include:
- Abbotsford: 2.1 per cent
- Vancouver: 1.0 per cent
- Victoria: 1.0 per cent
- Burnaby: -1.0 per cent
- Surrey: -1.3 per cent
- North Vancouver: -2.4 per cent
- Coquitlam: -3.5 per cent
- Langley: -3.9 per cent
- West Vancouver: -5.9 per cent
- Richmond -8.4 per cent
Things are expected to improve if we ease out of the crisis before the summer, with overall prices for Metro Vancouver to increase 0.5 per cent by the end of the year. If the crisis extends through the summer, Royal LePage predicts prices will end the year down 2.5 per cent.
“I went through 2008, so I’ve got some scars and experience going through market shocks,” added Dinani, “I think we (will) come out of this a lot sooner.”
But even when the crisis does start to end, we may see changes in how homes are sold. Open houses, which have ceased because of physical distancing, may not come back quickly, if at all.
“As realtors, the public open houses are now something of the past, naturally, but we are starting to leverage technology,” said Dinani.
He’s optimistic about the future, and said there’s still pent up demand and interest rates remain low. The big unknown is employment and people’s job security.
Many potential buyers may still decide to wait before making one of the biggest financial decisions in their lives.
“People are going to hit pause. People are going to want the dust to settle before they start you know making the biggest financial decisions in their lives,” Dinani said.