What the heck is going on in Vancouver real estate?

What the heck is going on in Vancouver real estate?

Over the past ten years there have been many government interventions intended to cool the housing market.  Yet prices continue to climb.  Mortgage Sandbox recently received a City of Vancouver data file from the BC Real Estate Association to look at the medium term trends. Condo apartments and detached houses are distinct markets and any statistics that combine the two can be unhelpful or misleading.  Two trends are common to apartments and detached homes.

First of all, a lot fewer homes are selling now than in the past.

Second, it appears there may be some abuse of the industry practice of “de-listing” or cancelling a listing. More on this later.

Apartment and house markets differ a lot in terms of availability and price pressure. 

Condo Apartments

  1. The crisis in supply availability has worsened

  2. Prices are rising and could continue upward

Detached Homes

  1. Supply has improved significantly

  2. Prices are slightly down and will likely continue to drop

Condo Apartment Market

The most pressing issue is the lack of apartments for sale. We now have half the inventory for sale that was available in 2015. In other words, even though the total number of apartments in Vancouver keeps growing, no one wants to sell them.

There has been a stark worsening of buyer conditions between 2015 and 2018, and by most accounts there was already a housing affordability crisis in 2015.

Vancouver Condo Apartments

  March 2015 March 2018 % Change
# of apartments for sale 2,183 920  ⇓ 58%
Sales 696 505  ⇓ 27%
Home sales-to-active listings ratio 32% 55% ⇑ 72%
Benchmark price Vancouver West  $515,000 $844,700 ⇑ 64%
Benchmark price Vancouver East $316,000 $577,600 ⇑ 83%

Source: BC Real Estate Association

While apartment prices climb, Vancouver has also seen a downward trend in sales. Here are some key factors that could explain the lower completed sales:

  1. Fewer than half as many apartments are for sale so it may not be surprising that sales have dropped by 27%.

  2. Taxes and high prices have turned off speculators.

  3. Higher interest rates and new mortgage rules have reduced buyer ability to match the asking prices.

  4. Buyers may be taking a “wait-and-see” approach to see where the above factors take the market.

We will never be able to identify the impact of each factor, however the best long term solution, and the one the government has the most control over, is to increase the number of apartments built annually. Current municipal processes were designed for a normal housing market and their performance over the past 10 years would indicate they lack the flexibility, speed, and adaptability to address a housing crisis.

We have half the supply that was available in 2015

One of the odd aspects of the current market is the number of cancelled or dropped property listings. Properties were listed for sale, never sold, and the listing expired or was removed from the market. These aren’t reported by the Greater Vancouver Real Estate Board in the published statistics but can be calculated using the numbers they provide for the City of Vancouver:

Total Inventory end of January


Plus New Listings February


Minus Homes Sold in February


Minus Dropped Listings February


Total Inventory end of February


Over the past 8 months, starting August of 2017, an average of 24% of listed apartments have been delisted every month while the average over the same month in 2015 was 14%. That’s a 93% increase in de-listed properties. Good reasons to de-list are to:

  1. Allow the seller to make repairs or improvements to raise curb appeal

  2. Avoid selling during a slow season (e.g., Spring is the best season to sell)

  3. Avoid selling during a soft market and re-list once the market improves

  4. Avoid competing against similar properties for sale in the neighbourhood

A seller may also de-list and re-list with the intent to mislead buyers and generate fresh interest in their home. In other words, the seller attempts to hide the fact that the home is not selling as quickly as other homes by canceling their listing with the intent to re-list in the future with a fresh “days-on-market” counter. This is considered perfectly ethical and there are no controls in place to prevent sellers from doing this, and since there are legitimate reasons to do it, there is potential for abuse. It is common industry practice when a price drop is substantial to cancel and re-list the property rather than to do a price adjustment on a “stale” (i.e., many days on market) listing.  Other reasons for cancelling and re-listing: 

  1. The real estate agent agrees to list at the seller’s desired (higher) price, with the understanding that if the home doesn’t sell within a reasonable time it will be cancelled and re-listed at a more realistic price to attract more interest.

  2. The seller is testing the market and is not fully committed to selling. Often you may see a listing cancelled and re-listed multiple times, and at very similar prices.

  3. The agent wants to attract new views to the home. In a fast market, agents tend to focus on new listings since their clients have seen everything previously listed. Once a home has been on the market for a few weeks, there is a perception that it has either already been sold (MLS can be slow to report sales), or there is something wrong with the property.

  4. The seller decides to re-list with another agent due to lack of satisfaction.

The current City of Vancouver market must be slower than the statistics would lead you to believe because sellers have doubled their use of de-listing.

Detached Home Market

Supply of detached homes rose by over 20%

The supply of detached homes has risen by over 20% since 2015. There aren’t that many more actual homes, but there are more homes for sale today than there were in 2015 which means more choices.

Let’s temper the good news by pointing out that the benchmark Vancouver West home costs  $3.5 million and the benchmark in Vancouver East is $1.5 million which classifies almost the entire city as “luxury” real estate. This leads us to be less surprised by the second trend, which is a steady decline in sales.

We are in uncharted territory with new taxes, mortgage rules, interest rate hikes, and anti-money laundering initiatives, so we could still see the traditional increase in sale this Spring. However, the Spring surge in sales is already late, and at the current sales pace, it would take 11 months to sell all of the homes on the market today. This trend shifts more power to buyers who will be able to add conditions to their offers and make offers below asking. Unfortunately, these homes are still not in the realm of possibility for 99% of homebuyers.

Similar to the apartment market, the detached home market has seen a rise in de-listings but it is a much less alarming one. The spikes in cancelled listings around the December holidays are not surprising. During the holidays, sellers are reluctant to invite buyers into their home between family gatherings and while there are gifts under the tree.


Even though prices have remained buoyant, there are definite signs the market is softening, and that sellers may be abusing the system to hide the softening market conditions.

To be clear, the market is very “tight” so at this stage a softening of the market would steer apartments toward a “balanced market” where buyers and sellers both have equal negotiating power. Single detached homes would head deeper into a “buyer’s market” where buyers can actually negotiate concessions from sellers.

The potential for abuse of de-listing is of greater concern since the practice favours the seller over the buyer. It appears that the MLS system has limitations and sellers are using de-listing as a workaround to generate interest in their property. These practices lead to inaccurate statistics being reported to buyers, government, and economists. The accuracy of these numbers is important because they are being used to make major decisions like buying a home, setting housing policy, and forecasting economic growth. Here are specific statistics that that could be up to 25% inaccurate because of these practices.

  • New listings

  • Active listings

  • Home sales-to-new listings ratio

  • Average days on market

  • % sold above/below asking

Ideally, the MLS system and the use of the system should be improved to give sellers what they want while providing accuracy and transparency to buyers and other people who depend on it.


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