Sales for Townhouses and Condos are UP in East Vancouver, despite overall 10 year lows for the city as a whole

Hello Everyone,

The Real Estate Board of Greater Vancouver (REBGV) today announced some unsettling statistics in their monthly broadcast of market information. The leading line reads:

"The number of residential property sales hit a 10-year low in Greater Vancouver for June, while prices remained relatively stable."
http://www.rebgv.org/news-statistics/greater-vancouver-housing-market-favoured-buyers-june

...and the story was reported in the Vancouver Sun:
http://www.vancouversun.com/business/commercial-real-estate/Vancouver+sales+year+real+estate+board+declares+buyer+market/6882325/story.html

These numbers reflect the total number of all residential sales across Vancouver, comparing June sales figures to June sales figures in previous years. 

Digging into the details reveals a slightly different picture from Vancouver's westside vs east.  Sales figures are down on the westside, across the detached (51%), attached (34.3%) and apartment (10.7%) segments, comparing June 2011 to June 2012.  However on the eastside, sales for both attached and apartment properties are up from this same time last year by 2.9% and 22.7% respectively.  Detached home sales took a beating, and are down 40% from June 2011.

The number of active listings on the market is higher across all market segments compared to June of previous years on both the east and west sides of the city.  Despite this, both the attached and apartment homes on the eastside remain in a seller's market with 4.4 and 4.3 month's supply of inventory respectively.  Detached homes in the east have entered a balanced market at 6.5 months supply.  Again, the westside is softer, with buyer's markets across all property types.

Median sales prices showed moderate increases everywhere from the same time last year, except for detached homes on the westside, which fell roughly 14% (and a little over 6% from May 2012).

Overall, supply is up and sales are down, so we should expect to see some downward pressure on prices, more so on Vancouver's westside.  For how long?  No one knows, despite the many predictions and speculations being thrown around. 

Interest rates continue to remain at record lows.  Again, for how long, we're not sure, albeit we shouldn't expect them to get any (or at least much) lower.

So, let's have a look at that.  Using RBC's online mortgage calculator, I had a look at a $500K mortgage at a rate of 3.06% interest on a 5 year term amortized over 25 years with monthly payments vs a $450K mortgage with 4% and 4.5% rates of interest (everything else remaining the same).  Looking at these scenarios, you'll end up spending just over $13,000 more in interest on the $450K mortgage at the 4% rate, over the 5 year term vs the higher mortgage amount with the lower interest rate.  If the rate goes up to 4.5%, it becomes almost $24,000 more in interest spent.

Is now a good time to buy?  Low interest rates and a good amount of active inventory would make it favourable.  However, only you can answer that question. 

When you, or someone you know, is ready to list or buy a home or investment property, I look forward to helping you through the process.

Please don't hesitate to get in touch if you have questions or would like more information on any of this:
email: kim@kimmcalpine.com
cell: 778 317 9909
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