Apartment sales in Metro Vancouver have slowed considerably since last year, but dollar volumes continue to climb as rental housing remains scare.
A new mid-year report from the Goodman team at HQ Real Estate Services Inc. shows a 36 per cent decrease in Vancouver apartment transactions from 2016 to 2017. Eighty-seven transactions took place during the first six months of 2017, versus 124 transactions during the first half of 2016.
“Interestingly, this is a continuation of a noteworthy trend that started during the second half of 2016 when a total of only 50 buildings sold,” the report states.
However, sales in the suburbs show less of a drastic change in sales and an impressive increase in dollar volume.
Building transactions in Vancouver’s surrounding cities have only dropped 20 per cent, from 49 sales in the first half of 2016 to 39 in 2017. New Westminster saw the most sales during the first six months of 2017.
Dollar volume increases were led by suburb sales, which increased in value 63 per cent over 2016. Vancouver dollar volumes only rose 1 per cent over last year.
Total dollar volume rose from $1.09 billion in 2016 to $1.35 billion in 2017.
“Why the severe decline in transactions in spite of unwavering investment demand? Simply put, it’s attributed to a lack of quality listings,” the Goodman team said. “The few newly available listings have experienced off-the-charts interest, with multiple showings and unconditional offers being the norm.”
Average prices per suite have risen 7 per cent. The average price for a Metro Vancouver unit was $380,133 for the first half of 2016 and $408,413 in 2017.
Buildings have increased in value due to their redevelopment potential, Goodman believes – particularly those in suburban areas, near Burnaby’s Metrowtown and parts of Coquitlam.
“Apartment owners are all too aware of sale prices and their meteoric climb of approximately 60 per cent over the past four years,” the Goodman team said. “They’re seeing the proliferation of rental buildings offered not for their yearly income but rather as development sites for future condos or rentals, often with staggering price premiums realized.”