Union city condos.Housing sales in Vancouver plummeted 33% year on year. The Canadian property market, led by the popular city of Vancouver, has been “plummeting” since 2018, a market that was once bought by overseas buyers is no longer what it used to be.Please Visit: Union city condos to Get Your VVIP Registration Today!
This week, the Greater Vancouver area Real Estate Board (REBGV) announced home sales in Vancouver in February. Housing sales in February fell 32.8% from a year earlier to 1484 units, 42.5% lower than the local 10-year average and the lowest February figure since 1985, according to the data.
The number of homes for sale recorded an increase of nearly 50% year-on-year and more than 7% month-on-month to 11590 units. Newly listed real estate also showed the same, month-on-month decline. In addition, local house prices in Vancouver fell at the same time. REBGV’s composite index of house prices fell 6.1 per cent from a year earlier, condominiums fell 4 per cent and townhouses fell 3.3 per cent.
Last month, fewer than 3900 new homes went public in Vancouver, down 7.8% from a year earlier, and the monthly list sales ratio was 12.8%, very close to the 12% warning line. Real estate prices are under strong downward pressure (list sales ratio is the ratio of active houses to all houses in the market).
On the bright side, housing sales rose 34.5% in February from the previous month, which the market attributed to the seasonal rebound in the spring real estate market.
Judging from the trend of house prices in the past five years, the once-popular Vancouver property has gradually lost its appeal, and house prices have continued to weaken since 2018. The real estate market in Toronto, another big city in Canada, is slightly better, with prices rising 1.6% in February from a year earlier, but newly listed home prices also fell 6.2%.
Consumers’ inability to afford high house prices is thought to be one of the reasons for the cooling of the Canadian real estate market. According to the international housing purchasing power survey conducted by real estate website Demographia in 2019, Vancouver ranks second in the price-to-income ratio of 12.6 times, second only to Hong Kong, China.
Further, total residential mortgage loans in Canada grew by only 3.2 per cent in December from a year earlier, the lowest monthly growth since May 2001, adding to the weakness of demand in the Canadian market. Mortgage loans are the largest, most profitable and most stable of most Canadian banking businesses, but profits are likely to decline, according to Craig Fehr, an investment strategist at Edward Jones, quoted by Bloomberg.
The release of this round of housing data has poured another basin of cold water on the already weak Canadian economy. Wall Street has previously mentioned that Canada’s GDP grew at an annualised rate of 0.4% in the fourth quarter of 2018, much lower than the previous and expected values, while household consumption was weak.
This gives the Bank of Canada reason to consider suspending interest rate hikes. The Bank of Canada said on Wednesday that due to a sudden slowdown in the pace of economic growth at the end of 2018, the central bank would remain patient and wait-and-see and leave policy rates unchanged for the third time in a row. Previously, the country’s central bank has been raising interest rates at a steady pace.