British Columbia

'Less bad' doesn't mean good: What Vancouver's housing market could hold in 2020

In the area overseen by Real Estate Board of Greater Vancouver, the average monthly sale price of a detached home, townhouse or apartment never went up or down by more than 17 per cent in 2019 compared to the previous year. 

For the first time in five years, there were no major surges in any aspect of the market

Home sales in Vancouver have slowed from their peak in the middle of this decade, with average sale prices for detached homes down by more than 20 per cent in some neighbourhoods. (Jonathan Hayward/The Canadian Press)

A funny thing happened in Vancouver's housing market in 2019: for the first time in many years, not much happened. 

"Condo prices have slowed down. The fear of missing out madness at open houses has gone away. So there's been a pause in the market," said Tom Davidoff, an associate professor at UBC's Sauder School of Business.

One way to measure the relative calm of the market is by looking at the average sale price for detached homes, townhouses and apartments in the area overseen by Real Estate Board of Greater Vancouver.

Wild fluctuations were once common, as luxury properties were traded like hotcakes. But in 2019, the average value for any type of property never went up or down by more than 17 per cent compared to the previous year. 

That might not seem significant — but it's the first time that's happened since 2014. 

In between, a massive surge in housing prices created both a windfall for existing homeowners and a backlash that contributed to the fall of provincial and local governments. 

But with a host of taxation and anti-speculation measures now in place, and new supply continuing to come on the market, prices for all types of housing stabilized in 2019, with small declines generally seen across the board. 

"We wound up in a pretty balanced place," said Davidoff. 

"I think it's a pretty good outcome in that way and I think you've probably seen ... a calming of the public discourse around housing."

Too soon to predict 2020

Whether a stable 2019 will continue into 2020 is another question. 

Multiple housing experts told CBC News it is difficult to predict what direction the housing market will go next year. Market adjustments to the new taxes are one factor, but so are trade war concerns, continued low interest rates, and the effect of new mortgage rules

"The big picture is actually watching how mortgages, and the availability of mortgages and cheap money, will or will not become available," said Andy Yan, director of the City Program at Simon Fraser University.

Yan said that with debates around the effect of speculation taxes largely settled, the most heated policy arguments would likely be around rental housing, particularly whether proposed projects offered enough non-market and multi-bedroom units. 

"There is this idea of less heat being generated in the [housing] debate, but then there is much light being generated towards the conversation of what kind of city are we becoming," said Yan. 

"Who are we including, as well as who are we excluding?"  

'Not magically affordable'

It's a conversation that will play out across Metro Vancouver next year: not only will Vancouver fully embark on city-wide plan consultations, but a number of municipalities — including Port Moody, White Rock and the District of North Vancouver — will consider changes to their Official Community Plans (OCP). 

In all of those communities, mayors were elected on a promise of slowing down growth, and new OCPs will allow opportunities to put new regulations on the height or form of new buildings in town centres.   

At the same time, while the housing market has slowed down, it's not exactly affordable: home prices in Metro Vancouver are still among the most expensive in North America, and the Canada Mortgage and Housing Corporation is forecasting the region's vacancy rate will only increase to 1.1 per cent in 2019 from 1.0 per cent in 2018. 

"Vancouver is not magically affordable, but it's less bad than it was," said Davidoff.  

And as long as that's the case, housing will continue to be a big topic of conversation here — no matter how "stable" things might be on the surface. 

"It's real estate in Vancouver," said Yan. "It's always dialled to 11."

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