Vancouver Housing Market Outlook 2023
Table of contents
Vancouver Market Report Summary
- The benchmark single-family home in Vancouver increased by 0.70% year-over-year to $2,014,900 in July 2023. In comparison, provincially, the benchmark single-family home sale price in BC was down 1.8% from a year ago to $1,357,000.
- Vancouver’s benchmark townhouse house price increased by 1.2% year-over-year to $1,104,600 in July 2023. In comparison, provincially, the row/townhouse sale price in BC is down by 1.3% from a year ago to $863,900.
- The benchmark condo price in Vancouver increased by 2.6% year-over-year to $771,600 in July 2023. In comparison, provincially, the benchmark condo sale price in BC is also up by 1.1% from a year ago to $661,300.
- Vancouver’s benchmark composite home price increased by 0.5% year-over-year to $1,210,700 in July 2023. In comparison, provincially, the average home sale price in British Columbia was down by 1.7% from a year ago to $998,900.
- The average rent for a 1-bedroom apartment in Vancouver increased by 14.4% year-over-year to $2,379 for July 2023.
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Vancouver Housing Market Summary
Data from the Real Estate Board of Greater Vancouver (REBGV) indicates that the average price of resale residential homes sold across Vancouver in July 2023 was $1,210,7, a slight increase of 0.5% compared to a year ago.
With a sales-to-new-listings ratio (SNLR) of 53%, a balanced market continues to reign for the last 3 months in Vancouver.
Verbatim: What local experts from the Real Estate Board of Greater Vancouver (REBGV) say about Greater Vancouver’s regional housing market:
“While sales remain about 15% below the ten-year average, they are also up about 30% year-over-year, which is not insignificant. Looking under the hood of these figures, it’s easy to see why sales are posting such a large year-over-year percentage increase. Last July marked the point when the Bank of Canada announced their ‘super-sized’ increase to the policy rate of one full percent, catching buyers and sellers off guard and putting a chill on market activity at that time.” says Andrew Lis, REBGV Director of Economics and Data Analytics.
“What’s interesting to see in the current market environment is that, while the Bank of Canada rate hike this July was only a quarter of a percent, mortgage rates are now at the highest levels we’ve seen in Canada in over ten years,” Lis said. “Yet despite borrowing costs being even higher than last July, sales activity surpassed the levels we saw last year, which I think says a lot about the strength of demand in our market and buyers’ ability to adapt to and qualify for higher borrowing costs.”
Month-over-Month Market Expectations
|Month||Composite Price||Units Sold||New Listings||SNLR||Market|
The sales to new listings ratio (SNLR) is the number of home sales compared to new listings. An SNLR under 40% suggests a buyer’s market where buyers have the upper hand and more negotiating power. An SNLR between 40% and 60% is a balanced market, while an SNLR of over 60% is considered a seller’s market.
Market Expectations Breakdown By Property Type
|Property Type||Sales||New Listings||SNLR||Benchmark Price||Market|
|Single Family Home||679||1,468||46%||$2,014,900||Balanced|
|Condo / Apartments||1,281||2,330||55%||$771,600||Balanced|
Historical Changes To Benchmark Prices In Vancouver By Property Type
Who’s buying Vancouver real estate?
Until recently, the primary demographics driving demand in Vancouver’s residential property market were those looking to upsize their homes, foreign investors looking to purchase an investment property in one of Canada’s most lucrative markets, professionals who recently immigrated to Canada in the past 5 years, and out-of-province migrants advancing their careers in one of the nation’s economic engine. With the passing of the omnibus Bill C-32 legislation, including the foreign buyers’ ban and anti-flipping tax, the GVA homebuyers’ demographic may be shifting away from foreign investment. However, it remains to be seen whether efforts to limit foreign buyers in Vancouver will have an impact; according to Statistics Canada, foreign investors make up less than 12% of the city’s total homeownership
According to a report by CMHC, investors and multi-property owners accounted for over 15% of British Columbia’s homebuyers in 2021, particularly in Vancouver. Consequently, Vancouver’s largest real estate market segment is now investors, ahead of first-time buyers, which was the market’s largest segment until 2016.
First-time homebuyers have traditionally accounted for more than half of all purchases. However, that share has slowly declined, reaching a low of 46.8% in June 2021, with real estate investors and multiple property owners picking up the difference.
According to Statistics Canada, multiple property owners represent 15% of owners in BC and Ontario and 20% in New Brunswick and Nova Scotia but hold 30% and 40% of existing housing stock, respectively.
Upsizing by buyers has driven Vancouver’s demand for condos, which showed the highest year-on-year price increases of all property types, from $1,090,900 in February 2020, which is still more than 25% higher compared to today’s price at 1,366,500. Upsizing buyers also continued to explore secondary markets like Burnaby, Richmond and Coquitlam over the last 6 months.
Immigration & Out-of-province Migration
While the pandemic saw thousands of homebuyers leaving urban areas searching for more space and affordable housing, new immigrants are making Vancouver homes on a continued surge. Although many Vancouverites continue to leave the GVA due to housing affordability limitations, many continue to move here. According to this report by Re/Max, the federal government expects to bring an additional 2 million new immigrants to Canada – many of whom will still choose to settle in Toronto, Vancouver and Montreal.
Getting a mortgage in Vancouver as a first-time buyer can be challenging for many, especially since BC does not offer competitive land transfer rebates compared to its property valuations.
While programs like the First Time Home Buyer Incentive are in place to help people afford homes in the city, this has yet to do much to offset affordability as the stress test makes it harder to qualify. At the same time, the Bank of Canada keeps rates elevated – adding a barrier to qualifying for a home in Vancouver without a combined household income over $200,000.
Given the slowdown over the last 12 months in home prices, Vancouver remains a difficult market to purchase a first home without outside financial assistance. Unsurprisingly, first-time homebuyers are no longer the largest segment of the city’s real estate market.
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Rents Continue to Surge Across Canada in October
Rapidly escalating rents have become a nationwide concern in Canada, profoundly impacting family budgets and exacerbating the housing affordability crisis in several regions. Let’s review rent increases and their implications on Canadian households.
According to Urbanation’s November 2023 Rentals.ca Report, the average asking price for rental units in Canada hit $2,178 in October, marking a significant 9.9% increase compared to the previous year. This surge is not recent; rents have consistently hit new highs for half a year. On a monthly scale, the average asking rents witnessed a 1.4% rise in October, a slight dip from the 1.5% and 1.8% monthly increments in September and August, respectively. These fluctuations are typically attributed to seasonal variations.
The average rent for 1-bedroom units reached $1,906 in October, a whopping 14% higher than in 2022. Similarly, the average asking price for 2-bedroom units was $2,255, an 11.8% annual increase.
Price escalations in Alberta, Quebec, and Nova Scotia fuel Canadian rent inflation. This inflation is partly due to substantial population growth and an influx of new rental supply priced above the average market rates. Among Canada’s major cities, Calgary in Alberta saw the highest annual rent growth for apartments for 9 consecutive months.
In Alberta, the standard rental price for purpose-built and condominium apartments reached a high of $1,686 in October, marking a 16.4% increase from the previous year. This rate outpaced the growth seen in September, which was 15.3%. In Nova Scotia, the average rent for apartments rose by 13.6% compared to the year before, reaching a price of $2,097. Quebec followed closely with a growth rate of 13.3%, leading to an average rent of $1,977.
Despite these increases, British Columbia held onto its crown as the province with the highest average apartment rents, clocking in at $2,639 in October. However, B.C. experienced a slight dip of 0.6% in its rent month-on-month, marking its second successive monthly drop. This drop resulted in a decreased annual growth rate of 9.8% in October from 12.3% in September. Vancouver consistently ranks as the priciest city for tenants in Canada. The average rent for a 1-bedroom unit in Vancouver was $2,872, and a 2-bedroom.
Edmonton climbed the ladder to secure the third spot in yearly rent increase among the most significant Canadian cities, with apartment rents witnessing an 8.6% rise annually, reaching an average of $1,461. Conversely, Ottawa slid from third to fifth as the annual rent increase slowed to 3.5% in October (down from a 9.7% yearly rate in September), with rents averaging $2,197. The asking rents for apartments in Ottawa experienced a minor slump of 0.3% on a monthly basis. While these figures were slightly lower than September’s prices, they marked an annual increase of 6.7% and 5.5%, respectively.
Ontario recorded the slowest annual growth in apartment rents in October, with a modest increase of 4.6% (in contrast to the 6.6% increase reported for September). After falling by 0.4% between August and September, the average rent requests in Ontario are stabilizing.
For the ninth consecutive month, Calgary has reigned supreme in yearly rental increments for flats amongst Canada’s most populous cities. The request for purpose-built and condominium apartments in Calgary saw a significant surge of 14.7% from the previous year, settling at an average price of $2,093. Montreal held its position as runner-up, with an annual rent increase of 10.2%, accumulating to an average of $2,046 as of October.
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In Vancouver, the priciest among Canada’s major cities, average rents fell by 3.7% month-on-month to $3,215. The annual rent increase in Vancouver decelerated to 4.4% in October (down from 7.7% in September). Toronto recorded a year-on-year decline of 0.8%, averaging $2,908 — marking the first annual rent drop since August 2021.
Of Canada’s top 25 rental markets with the highest costs, Ontario was home to 14, British Columbia (B.C.) 9, and the remaining 2 in Quebec.
The 3 priciest regions for average apartment rental rates in October among small and medium-sized cities were all based in British Columbia. They included North Vancouver, with an average ask of $3,360; Coquitlam, at an average of $3,116; and Richmond, with an average of $3,051.
Ontario dominated the list of the top 10 priciest markets with 6 cities. The highest-ranking Ontario city was Oakville, in fourth place, demanding an average rent of $3,008. This was followed by Vaughan in sixth place with an average rent of $2,754 and Mississauga in seventh place with an average of $2,700. In the high-end rental markets outside the Greater Toronto Area (GTA), Kanata came out on top in October with an average rent rate of $2,561. Barrie, Guelph, and Waterloo followed closely behind with their respective rates of $2,326, $2,246, and $2,227.
In Quebec, the areas with the highest average apartment rents during October were represented by 2 Montreal markets: Côte Saint-Luc ($2,458) and Mount Royal ($2,427). Notably, Côte Saint-Luc witnessed the most rapid rent growth in October, recording a 36.6% annual increase. This was followed by a 29.1% yearly hike in Richmond and a 22.3% annual surge in Red Deer.
During October, we observed a notable surge in listings for co-living spaces across provinces like B.C., Alberta, Ontario, and Quebec. Compared to the previous year, the numbers climbed a significant 42%. Parallel to this increase, the average rental prices for shared residences also experienced growth. A rise of 19% was recorded on a year-over-year basis, reaching an average monthly rental of $964.
Specifically, shared accommodation rentals commanded the highest rents in B.C., where the average cost was $1,176. In particular, Vancouver emerged as a pricy city for such arrangements, with an average rent of $1,454. Moving over to Alberta, renters seeking roommates were typically expected to shell out an average monthly rent of $870 in October. In terms of cities, Calgary noted an average of $911, while Edmonton was slightly more affordable at $737.
Ontario did not lag far behind B.C. in terms of high rents for shared accommodations. It held the position of having the second-highest average roommate rent in Canada at $1,068. Toronto led the pack in the province with an average rent of $1,312, and Ottawa followed with an average of $966. Meanwhile, Montreal’s shared housing market in Quebec saw an average asking rent of $873.
Several factors contribute to the escalating rental situation, including interprovincial migration and a declining homeownership trend due to high interest rates. A third of Canadian households are renters, a rate growing twice as fast as homeowners. As rents continue to soar, Canada must address housing affordability and ensure adequate rental supply. These issues are not only affecting family budgets but also contributing to broader economic challenges, including inflation. By tackling these issues head-on, Canada can ensure a more sustainable and equitable housing market for all its residents.
Market Rents Summary
Each $100K in mortgage balance costs an average of $601.11 per month on nesto’s lowest fixed 5-year rate at
Rental Prices Compared to Other Canadian Cities
Rental Prices Compared to Other Provinces and Nationally
Average Rents by Housing Type
Rental Growth by Housing Type
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Frequently Asked Questions
Is the Vancouver housing market going to crash?
Vancouver home prices are currently sagging due to surging mortgage rates. Vancouver prices remain some of the highest in the country, and with the current Bank of Canada rate hikes, mortgages have been harder to qualify for due to the stress test. Vancouver prices will recover quicker than other areas once mortgage rates decline back to manageable levels for homebuyers to purchase or homeowners to refinance their homes.
Will Vancouver housing prices increase in 2023?
Although currently declining, many experts believe that a turnaround is imminent. Buyers are waiting on the sidelines for the opportune time to make a move.
How do I get approved for a mortgage in Vancouver?
To get approved for a mortgage in Vancouver, look at Vancouver mortgage rates and see how much you can afford. This will give you an idea of what it will cost to buy a home in Vancouver at today’s prices and rates. You can check out what you need to get pre-approved for a mortgage or start by getting a quote.
Vancouver’s property market is set to remain strong as increases are expected for the remainder of 2023. The average home price in Vancouver has dropped significantly over the last year. However, this comes after months of record consecutive price rises during the pandemic and one of the most intense periods of price appreciation the city has ever seen.
While the property market appears to be shedding value in Vancouver, it’s important to remember that this is relative to a long period of superheating in the area.
If you are looking for a home in 2023, expect an imminent turnaround in the housing market over the next few months. Contact our knowledgeable and commission-free mortgage experts at nesto to help guide you through the home-buying process.
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