Category Archives: supply

West Side housing boom loses its sizzle

The Globe and Mail has a suprising headline: Sky-high housing prices in Vancouvers west side short lived.

Both sales and prices are down at the top end even more markedly than in the rest of the region, which has also seen a general slowdown this spring.

A house on the 3000 block of West 24th Anenue, first listed at near $4.5-million six months ago, sold on April 15 for $3.35-million.

Fresh statistics from the Greater Vancouver Real Estate Board show the number of sales on the west side is down by nearly 40 per cent for the first four months of the year. Only a third of the nearly 400 homes listed in April have sold – one of the lowest rates in the region.

Realtors say the slowdown appears to have resulted from a combination of tighter lending practices by local banks, which now want proof of income to service large mortgages, more restrictions on how much capital can be taken out of China, and fewer immigrants.

“Banks are now requiring borrowers to disclose incomes and assets before mortgages are approved, as of the last six weeks,” said west-side realtor Marty Pospischil, who specializes in selling single-family homes owned by long-term residents. Last year, he says 90 per cent of his 100 house sales were to “offshore buyers” – people not living here yet, who flew in to buy. This year, it’s less than a tenth of that. “We’re now seeing a 50-per-cent collapse rate in deals, when it’s usually more like 5 per cent,” he said.

Read the full article here.

West side a fragmented market

I think this comment from zrh2yvr is worth highlighting, so I’m pasting it into the submission page!

OK – Some more interesting data – Again just the facts.

Van-West Detached, a market which seems to be suffering, can be described as three markets. One where there are over 350 units for sale in excess of 3.2 million with MOI of over 18 months, 185 units for sale at 1.9M or less with a MOI of 3.8 months and approx 340 units for sale between 1.9M and 3.2M with MOI at 6.7 months.

For units priced at under 1.9M, there is a severe lack of inventory which could be a reason for lower sales volumes. One has to wonder however, what will become of this high-end with properties for sale over $3.2 million? They are selling only at a slow pace but at 18 months, I would say many sellers would be happy to just wait for thay buyer.

Meanwhile, inventory is creeping up. Just like Richmond however, it is creeping up only in the low-mid range of the properties. The number of properties for sale with an age of up to 10 years has not changed since January (approx 230 units). However, in the range of 10-115 years old, overall, inventory is up by 80 units or 17%. In the tear-down category (those with age of 999), there are 9 more units or 11% so this could also be seen to have increased.

What is this saying? I would say that until the top starts to fall, there is not much down side in the Van-West market. Not much upside either as on the higher-prices, there are many many choices.

When looking at MOI, Given that sales of the higher-end properties have been picking up, we are seeing MOI for the new inventory decrease where now there is only 13 months for homes up to 5 years compared to approx 17 months in January. This is not a great level and is truly one to put downward pressure on prices. One has to wonder how many of these properties are held by speculators or builders who need to sell.

Finally, what areas are we seeing with deterioration in MOI?

Oak – Now at 10 compared to 5
Kerrisdale – Now at 10 compared to 7
South Granville – Now at 14 compared to 12
Cambie – Now at 9 compared to 6
McKenzie Heights – 8 compared to 6

Shaugnessy has highest MOI still but has improved to 16 from 18.

The most important ares with low inventory and tight MOI are:
Kits – 3.7 months now compared with 3.4 previous
Dunbar – 4.4 months now compared with 6.2 previous
Point Grey – 5 months of inventory same as previous


So overall, we are seeing the market change. The foreign buyer and the top-end buyer are not in the marketplace in sufficient numbers to acquire the high-priced inventory that is for sale. Limited numbers of units for sale under 1.9M are creating tight supply, but also low sales volume. However, ALL inventory increases have occurred in the lower priced ranges and are not evenly distributed throughout the entire market. It is not clear what we will see next. Perhaps it will be recent low-priced land plays coming back on the market as they realize there is too much competition on the new-build market. Perhaps we will see some high-end builders having to reduce to clear their inventory.

Either way – it is going to play out slowly until there is a change in the credit markets that changes the access to credit for all buyers.