Residential developers, marketing executives and real estate agents are bracing for a sustained downturn in the housing market, after sales in April 鈥� usually one of the most active months of the year 鈥� plunged by double-digits in the Real Estate Board of Greater Vancouver region, which includes Squamish.
Vancouver real estate lawyer Richard Bell, executive vice-chair and founder of Avesdo Inc., told a real estate seminar May 8 that the Vancouver new home market has seen an 鈥渋ncredible run over the past 10 to 15 years.鈥� But, he added, 鈥淲e all knew it would come to an end and the end is nigh.鈥�
In April, just 43 per cent of pre-sale condos offered in Metro Vancouver sold, compared to 94 per cent in January, 83 per cent in February and 63 per cent in March, said Cameron McNeil, a partner in MLA Canada, the real estate marketing firm that hosted the Pre-Sale Pulse seminar at the BMO Theatre in Olympic Village.
In the resale sector, April sales of detached houses plunged 34 per cent through the Real Estate Board of Greater Vancouver, compared with a year earlier, while townhouse and condo sales were down 25 per cent and 24 per cent in the same period.
鈥淚 have been seeing more and more price reductions in the detached housing market,鈥� said Tina Mak, a top-producing Vancouver agent with Coldwell Banker Wesburn Realty. Mak, known for her eight-figure land assemblies, said investors should not expect a quick return on investment if they had bought recently.
鈥淎ll you can expect is capital gain. However, as long as the NDP is in power, I strongly believe the double-digits gain honeymoon is over. On top of that, there are many different new taxes, stricter rental rules,鈥� Mak stated in a missive to clients this week.
鈥淭his would be the seventh cycle since I got into the business in 1992,鈥� she said. 鈥淭he fact is when the market swings back up again, the next peak is always higher than the previous peak.鈥�
Meanwhile, she is 鈥渓ooking for U.S. investment opportunity for many of my investors.鈥�
Like Mak, McNeil said the fundamentals remain in place for a strong Metro Vancouver housing market: an estimated 40,000 immigrants arriving annually, relatively low mortgage rates, low unemployment and a robust economy.
鈥淥ur industry, though, is driven by fear and perception, and fear and perception trumps fundamentals every time,鈥� he said. McNeil said condo developers can expect slower sales over the next few months.
An estimated 11,000 new condos will start marketing this year in Metro Vancouver, McNeil said, but this 鈥渨ill barely scratch the surface鈥� of the true demand. He added that, like the last downturn in 2008, people would likely be surprised at how quick the recovery will be.
鈥淭his is Vancouver,鈥� agreed Bell. 鈥淚t will come back.鈥�
