The Real Estate Board of Greater Vancouver today shared a forecast from the Deputy Chief Economist of the Central 1 Credit Union. You can see the full Central 1 Credit Union report here and the REBGV article here.
The REBGV region lost ground in 2017 and again in 2018 for a net change over the two-year period of –54.8% in number of sales and –56.7% dollar volume. Bowen Island also lost ground in 2017 but rebounded in 2018 for a net change over the 2-year period of –14.8% in number of sales and +8.0% in dollar volume.
The highlights of the REBGV article are:
Looking aheadProvincial tax policy uncertainty, related to increases in the foreign buyer tax and the speculation tax , [Bowen Island is excluded from the speculation tax. - Ed.] will continue dampening detached home sales. Investors looking for a quick flip have largely disappeared.For the second half of 2018, Yu forecasts resale transactions province-wide will decline by 11 per cent, led by Vancouver and other urban centres. This decline results from tighter credit availability and tighter housing policy rather than economic weakness or increasing interest rates.New housing starts will reach 42,000 units province-wide in 2018, a three per cent decline from 2017.Starts will average 40,000 units in both 2019 and 2020.Waiting the market outA strong economy and insufficient inventory means owners will likely sit back and wait out the market.
- A significant correction is not forecast.
- Home sales have peaked, and the market is forecast to trend to a lower volume with slower price growth in 2019 and 2020.
- Resale housing transactions are forecast to rise modestly in 2019 and 2020.
- Metro Vancouver detached and luxury markets will see modest price declines.
Waiting the market out
A strong economy and insufficient inventory means owners will likely sit back and wait out the market"
Bowen Island, which is part of the REBGV, is performing better than the REBGV region as a whole. Because the Bowen Island market is predominantly detached homes, the figures are based on detached home sales only. The graphs represent the percentage change from 2016–2017 and from 2017–2018. Year-To-Date (YTD) figures are January 01 through August 31, and Year-Over-Year (YOY) figures are September 01 through August 31.
Both the REBGV and Bowen Island showed growth in the MLS® HPI YOY numbers over the two-year period but with slower growth in 2018. Net change for the REBGV from 2017 to 2018 was just +3.4% compared to Bowen’s +15.5%. The REBGV net change over the 2-year period 2016–2018 was +16% compared to Bowen Island’s +42.8%.
The market has slowed on Bowen. Total inventory in August 2018 was 28% higher than August 2017 (32 vs 25), new listings were down over 2017 (10 vs 11), and sales in the month showed no change over 2017; however, both YTD and YOY dollar volume and number of sales were up over 2017 as was the median sales price, demonstrating more resilience than the REBGV region as a whole.
Readers should note that Bowen Island is a micro-market, so small numbers can register as big percentages; however, percentage change is the most equitable method to compare the island market to larger mainland markets.
Looking at Bowen’s sales for the first three weeks of September 2018 YTD and YOY, we see sales flattening and inventory at August 2018 levels. MLS® indicates only 1 sale this month as of September 21, compared to 9 sales during the same period in 2017. Sales to date were 50 and 47 in 2017 and 2018 respectively—59 and 58 respectively if land-only sales are included. September YTD dollar volume was $54.8 million in 2017 vs $52.4 million in 2018—$58.7 million vs $59.8 million if land-only sales included.
With only 10 days left in the month, although September is not performing as well as August, YTD figures compared to 2017 are not significantly different. Unlike many areas in the mainland market, Bowen Island has not experienced a market correction.
*The MLS® Home Price Index (MLS® HPI) is a tool to measure home price trends in Metro Vancouver and other major markets in the country.
All data © 2018 BC Northern Real Estate Board, Chilliwack and District Real Estate Board, Fraser Valley Real Estate Board, and Real Estate Board of Greater Vancouver. All rights reserved. Data deemed reliable but not guaranteed.