Home prices in Vancouver have resisted the sharp downturn seen in Toronto, but that may be changing fast. Greater Vancouver Real Estate Board (GVREB) data shows prices made a sharp drop in January, with losses accelerating in recent months. A combination of weak demand and multi-year highs for inventory—and a new construction glut—signals more downward pressure ahead.
Greater Vancouver Home Prices Enter Second Wave of Correction
The price of a typical home across Greater Vancouver.
Source: GVREB; CREA; Better Dwelling.
The price of a typical home dropped substantially last month, shedding 1.2% (-$13.4k) to $1.10 million in January. Greater Vancouver home prices are now 5.7% (-$66.6k) lower than last year, and 12.0% (-$150.9k) below the April 2022 record high. It’s a substantial drop, although it may not seem that way in contrast to Toronto falling at nearly double the rate.
Greater Vancouver’s comparative reliance may be tested later this year. Nearly half (44%) of the drop from peak has occurred within the past 12 months, implying acceleration… and 88% of the declines in the past year occurred within the past 6 months.
Driving this massive shift is the market’s realization that sales aren’t just bouncing back, and an aggressive rise in inventory.
Vancouver Sees Sales Fall, Hits Highest Level In Over A Decade
Greater Vancouver’s existing home sales and MLS active listings for January.
Source: GVREB; CREA; Better Dwelling.
Winter isn’t usually busy, but Greater Vancouver’s slowdown is more than just weather-related. The board saw just 1.1k sales in January, down 28.7% from last year and 30.9% below the 10-year average. It was on par with 2023 and 2019, though both of those Januarys marked a seasonal trough. The difference this time is the epic buildup of inventory.
Greater Vancouver real estate sellers came out in full force last month. The board reported 5.2k new listings in January, up 7.3% from a year prior and 19.4% above the 10-year average. Weak sales helped drive total active inventory to 12.6k homes for sale, 9.9% higher than last year and 38% above the 10-year average. That’s not a flood of inventory—it’s a goddam, motherf&%king tsunami.
For context, CREA’s preferred measure of demand is the sales-to-new-listings ratio (SNLR). It’s a simple but effective tool used by the industry. A ratio of 40 to 60 percent is a balanced market where the market is priced right. A higher ratio is a seller’s market where prices generally rise, and below is a buyer’s market where prices fall.
The SNLR in Vancouver was just 21% in January, the weakest for the month going back to at least 2015. That’s a lot of downward pressure, and it would be surprising if that were resolved by Spring.
A lot of cities claim to have no inventory, but Vancouver is one of the cities where it’s historically been true. That’s no longer the case, and existing homes aren’t the only place seeing an inventory glut. The region’s developers were sitting on a record 5.5k new homes completed and unsold in December, representing over 1 in 4 vacant units across the country. Vacancy tax exemptions on new homes mean they face less pressure than existing inventory, but that’s a lot more choice than buyers have had in a very long time.
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