There is no doubt that the Vancouver real estate market has skyrocketed over the past decade and sales have been booming. However, as of recently, supply is beginning to meet demand, and this has caused the overall market to cool down considerably. And while detached home sales may be slumping, condominiums and townhomes are still being sought after, and thus, they are leading the way in the Vancouver real estate market.
The Reason for the Surge
There are numerous reasons why the condominium market is still booming in Vancouver, and the foremost of these is due to the large number of first-time home buyers. After all, detached houses can be very expensive in the Vancouver area and condos offer a slightly cheaper means of living while still remaining within the city limits. And all of this makes perfect sense, as first-time buyers are typically just beginning their careers and they do not yet have the funds necessary to purchase a house.
Looking at the Numbers
One of the best ways to determine the demand for different types of housing is by looking at the sales-to-active listings ratio. According to the Real Estate Board of Vancouver, the ratio for detached homes is 16.3% and analysts say that any number below 12% means that there is downward pressure on that specific market. In essence, this means that there are a lot of houses on the market and fewer buyers, therefore potential buyers have more choices and more time to decide when purchasing a home. And while detached homes are facing downward pressure, with a ratio of 76.3% condominiums and townhomes are still well above the equilibrium. A demand level such as this indicates that there are a limited number of condos on the market and a significant number of buyers looking for similar property types.
Condos Remain Hot
Living in the Vancouver area is very desirable, and this has caused a massive influx of buyers in recent years, which has triggered a substantial increase in home prices. However, as supply and demand have begun to reach equilibrium, detached home sales have declined. On the other hand, the increase in first-time buyers has caused the condominium and townhome market in Vancouver to remain hot. And while there is no doubt that eventually, these numbers will begin to balance, for now, condominiums and townhomes are leading the way in the Vancouver real estate market.