Metro Vancouver market sees sharp drop in sales

UBC housing analyst says trend indicates a 'significantly weakening market on the sales side'

 
 
Real estate sales in April sunk to the lowest levels for the month since 2001.
 

Real estate sales in April sunk to the lowest levels for the month since 2001.

Photograph by: Ian Smith, PNG , Vancouver Sun

Local homes sales are at their lowest levels for the month of April since 2001, according to a monthly report released Wednesday by the Real Estate Board of Greater Vancouver.

A local real estate analyst said the April numbers are consistent with a longer-term trend of slowing sales, and that a market correction might be underway.

"This is certainly consistent with a correction," said Tsur Somerville, director, centre for urban economics and real estate, Sauder School of Business at the University of B.C. "The first place you'd see that is in falling sales."

Somerville noted that for seven consecutive months - since October 2011 - sales have dropped compared to the same month a year before, and that the size of the drop has steadily increased.

"It's a clear indication of a significantly weakening market on the sales side. But there's no clear economic reason. It's not like interest rates are going up dramatically or the economy has slowed dramatically.

"People just seem less willing to pay the prices now than they were eight to nine months ago."

The benchmark price for all residential properties in April was $683,800, up 3.7 per cent from April 2011.

According to the REBGV report, the market is in a balanced state.

"Although April sales were below what's typical for the month, we continue to see, with a sales-to-active listing ratio of nearly 17 per cent, a balanced relationship between buyer demand and seller supply in our marketplace," said REBGV president Eugen Klein in a statement.

However, the report noted that Metro Vancouver sales totalled 2,799 in April, a 13.2-per-cent decline com-pared to the 3,225 sales in April 2011 and a decline of 2.6 per cent compared to the 2,874 sales in March 2012.

New listings for detached, attached and apartment properties totalled 6,056 in April, a 3.6-per-cent increase compared to both March 2012 when 5,843 homes were listed and April 2011 when 5,847 homes were listed for sale.

At 16,538, the total number of homes listed for sale increased 8.5 per cent in April compared to last month and 16 per cent above this time last year.

Meanwhile, the Fraser Valley Real Estate Board said there were 1,435 sales in April, down five per cent from April 2011, but up slightly from 1,412 sales in March.

In April, the board added seven per cent more new listings compared to one year ago, up to 3,134 from 2,918, pushing the number of properties for sale to 10,312, the highest since July 2010.

The benchmark price for a detached Fraser Valley home rose 5.3 per cent in the year to $576,600 last month.

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