Metro Vancouver real estate remains at moderate risk of price correction : CMHC

The report shows a shift towards a sellers’ advantage in most of the submarkets, especially in Port Coquitlam and Langley.

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Metro Vancouver’s housing market remains at a moderate risk of a price correction and may be shifting to a seller’s advantage, according to CMHC’s Housing Market Assessment.

Wednesday’s report says there are no signs of overheating for the region, and the most notable trend in the third quarter was the return of buyers and sellers to the market.

Both sales and new listings were “unseasonably high” in the third quarter, which Braden Batch, a senior analyst for CMHC, says was a result of the market processing a backlog of transactions that were delayed by the COVID-19 lockdown.

The report says sales grew faster than new listings in most submarkets, and the data show a shift towards a sellers’ advantage in most of the submarkets, especially in the Tri-Cities and Langley.

Port Coquitlam and Langley had the largest drawdown of single-detached inventory, with about 30 per cent or more of available homes sold.

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Typically, this leads to a rise in prices as buyers face greater competition for scarce homes, said Batch.

However, he says price acceleration was not detected in the third quarter. Home prices increased 10 per cent after adjusting for inflation, a level not seen since 2017, though it was was not enough to breach the threshold for price acceleration.

In the single-detached home markets, the largest price gains were in Delta, White Rock, and Port Moody.

Between April and the end of June, Batch said buyers and sellers “sort of just put it on pause” in Metro Vancouver markets, primarily because of the lockdown rather than sudden unemployment.

CMHC’s considers four factors in assessing housing markets — the degree a market might be overheating, rising prices, how much properties are overvalued compared with fundamentals and whether developers are overbuilding new housing.

The CMHC calculated Metro Vancouver showed low, or little, evidence that markets were overheating, based on sales-to-available-listings ratios ranging from a low of nine per cent on detached homes to a high of 27 per cent in Port Moody.

ticrawford@postmedia.com

-With a file from Derrick Penner