Vancouver's real estate market ended 2020 with a bang, as a December home-buying spree helped the market rebound from a weak 2019, despite the COVID-19 pandemic.
Home sales jumped 53.4 per cent in the final month of 2020 compared with December 2019, the Real Estate Board of Greater Vancouver said on Tuesday. The board said 3,093 homes were sold in December, up from 2,016 in December 2019 and slightly more than the 3,064 homes sold in November.
The board said the composite home price in Vancouver ended the year at $1,047,400, up 5.4 per cent from the same time last year. Board chairwoman Colette Gerber said the COVID-19 pandemic brought the housing market to a "near standstill" in March, but demand for housing returned through summer, fall and winter--intensified by low interest rates.
"Robust December sales outpaced long-term averages in what's traditionally the quietest month of the year in real estate," Gerber said in a statement. "This was part of an unusual seasonal pattern the market followed last year, which can be attributed in large part to the pandemic."
Indeed, December's home sale upswing has been seen across the country, even as a second wave of COVID-19 swept through. Calgary's home sales hit a new record for December, the strongest showing since 2007, the Calgary Real Estate Board said on Monday. On Tuesday, the Quebec Professional Association of Real Estate Brokers said that the Montreal real estate market set sales records in all areas last month.
In Vancouver, Gerber also pointed to the pandemic's effect on "shifting housing needs," as more buyers have searched for stand-alone homes outside downtown amid more widespread stay-at-home and work-from-home mandates.
Sales of detached homes led the December gains, rising 71.3 per cent from December 2019 to 1,026. Apartment sales were up 40 per cent from last December, totalling 1,474. Real estate agents sold 593 attached homes, such as townhomes, in December, up 62.9 per cent from December 2019. Composite home prices were up 10.2 per cent year-over-year to $1,554,600 for detached homes, 2.6 per cent year-over-year to $676,500 for apartments, and 4.9 per cent year-over-year to $813,900 for townhomes, the board said.
Across the metro area, Bowen Island, the Sunshine Coast, and Tsawwassen saw the biggest one-month jump in composite home prices in December. Nearby Fraser Valley Real Estate Board said on Tuesday that December 2020 home sales were 81.2 per cent above normal for the month in the region surrounding Surrey, B.C.
Despite December home sales that were 57.7 per cent above the 10-year average in Vancouver, 2020 as a whole was below the city's 10-year average, after starting the year in recovery from a slump. A year ago, the board noted that homebuyers had been waiting to see how prices would react to the mortgage stress test, new taxes, and other policy changes. The B.C. government's speculation and vacancy tax, City of Vancouver's empty homes tax and limits on short-term rentals were all in effect by 2019, Canada Mortgage and Housing Corp. said in a recent report.
After 2019 home sales ended 20.3 per cent below the 10-year average for Vancouver, the real estate board said 2020 wrapped 2.8 per cent shy of the 10-year average. Heading into 2021, the number of homes listed for sale in Vancouver was down 0.8 per cent in December compared with December 2019 -- and down 23.2 per cent from November. That put the sales-to-active listings ratio -- a closely watched measure in the real estate market -- at 36.2 per cent in December.
The real estate board said that a sales-to-active listings ratio above 20 per cent over a sustained period will push home prices higher. Gerber said that going forward, "the supply of homes for sale will be a critical factor in determining home price trends."