The Landing condo development is seen under construction in Langley, B.C., on Monday December 10, 2018. THE CANADIAN PRESS/Darryl Dyck

The Landing condo development is seen under construction in Langley, B.C., on Monday December 10, 2018. THE CANADIAN PRESS/Darryl Dyck

Condominium market still ‘a lot better’ than normal in Vancouver suburbs

The Fraser Valley, east of Metro Vancouver, has long been considered a more affordable haven for first-time homebuyers.

A tempting bright-red advertisement for a new condo development in a Vancouver suburb circulated online this fall, sparking excitement from first-time homebuyers and concern among long-standing real estate observers.

The developers of The Landing, a 78-unit complex in Langley, were offering to pay the mortgages for a year of the first 20 buyers and give remaining buyers a $10,000 discount.

It looked like a sign of the times: had provincial and federal government measures to cool the market been too successful? Were developers stuck with a glut of inventory as sales and prices dropped off a cliff?

Not really, according to the marketer behind the promotion.

“The way we run our sales programs is we run basically a different promotion almost every week. I’ve been working in suburban markets for a long time and honestly, what I’m seeing right now is it’s not even at a normal market. It’s still a lot better,” said Trevor Street, CEO of the Partners Marketing Group.

“What’s normal for me is having four or five other sites that are active, that are open, that buyers can go to and shop around. I remember a time marketing developments when I ran out of registers to call in our database and started cold-calling rental buildings.”

Read more: B.C.’s skyrocketing real estate market will ‘correct’ in 2019: analyst

Read more: Dozens speak at Vancouver hearing that could see duplexes replace single homes

That was back in 2013 or 2014, he said, before Vancouver’s real estate market exploded and a ripple effect moved through its suburbs and the rest of British Columbia. By 2016, Street definitely didn’t have to run any promotions — he even told developers not to bother building sales centres.

The Fraser Valley, east of Metro Vancouver, has long been considered a more affordable haven for first-time homebuyers.

After prices and sales climbed across the Lower Mainland in 2015 and 2016, the B.C. and federal governments stepped in to attempt to cool the market. In the past nine months, sales have slowed and prices have curbed their meteoric rise. But while the market is softening, it’s not over-correcting, just returning to a more normal state after a wild few years, experts say.

Street said he realized about six months ago that suburban developers needed to bring back promotions to entice buyers. But while amateur investors are sitting out, professional investors are jumping on board, he said.

“They’re coming in right now and it’s a feeding frenzy,” he said. ”These guys know this isn’t going to last. These downturns last nine months to a year, and we’re already nine months into it.”

The average price of an apartment in the Fraser Valley Real Estate Board coverage area, which includes Surrey, White Rock, Langley and other communities, was $383,204 last month, still up from $359,053 in November 2017. In the same month in 2014, it was $200,952.

As for detached housing, the average price was $1,017,754 last month, up from $1,011,787 in November 2017 and considerably higher than $653,426 in November 2014.

The real estate board prefers to use a “benchmark” price, which adjusts for the high and low ends of the markets, and that figure was $976,200 for a detached house last month and $422,500 for an apartment.

The market started really heating up in the beginning of 2015, said board president John Barbisan.

Barbisan said he uses the sales-to-active-listings ratio, referring to the number of sales compared to active listings, as a thermometer. In a balanced market, the ratio sits around 18 per cent, meaning almost two in 10 homes are selling. The higher the ratio gets, the more advantage to the seller, and in 2016 it was 60 per cent, he said.

Things began to cool in the spring of this year, he said, and now the sales-to-active-listings ratio is 14 per cent.

“It was like a tap turned off,” he said. “It’s as if all the buyers got together in a hall one night and decided nobody’s going to make an offer anymore.”

The federal mortgage stress test initiated in January appears to be a major factor, he said. The stress test requires mortgage-seekers to prove they would be able to make payments even if interest rates rose substantially, reducing borrowing power by as much as 20 per cent.

“That has to come out somewhere. They’re either buying cheaper homes or they’re not making the offers they would be,” he said.

Provincial government measures, including a 0.5 per cent speculation tax on secondary homes left vacant and a 20 per cent foreign buyers tax, have had a “negligible” effect compared with the stress test, Barbisan said.

But he said he’s “not at all” concerned about the slowdown, noting that he has spoken with mortgage brokers who say relatively similar numbers of people are still coming to get pre-approved. People still want to buy homes, but they may not be finding what they’re looking for or are waiting for prices to decrease further, he said.

“I’m not sure what they’re waiting for, but when you want to buy a home you’re only putting it off for so long,” he said.

Barbisan added he hasn’t heard of anyone being underwater on their mortgage, as prices have still risen so much that owners have a fair bit of equity in their homes.

Steve Saretsky, a Vancouver real estate agent, said the market across the region is going through a downturn but it’s not “major,” and it’s to be expected after the run-ups of the past few years.

“Any time you have that kind of growth, eventually it’s going to swing the other way,” he said. “Has it gone too far? I think a lot of people who are complaining about housing affordability would probably tell you it hasn’t gone far enough.”

Government policies have helped move the pendulum, but it was more or less inevitable, and global housing markets are also slowing down, Saretsky said. People are quick to criticize the stress test and new provincial taxes while forgetting how easy regulators have gone on the housing market for years, he added.

“Everyone in the world talks about how indebted Canadian households are. There’s no question that it’s definitely been a pretty lenient borrowing spree over the last 15, 20 years,” he said. “Now, all of a sudden everybody’s upset because the punch bowl’s been taken away. But parties don’t go on forever.”

He acknowledged that it’s hard on real estate agents because sales volumes are down and they’re making less money.

“But, again, I think we’ve had it pretty good for a number of years.”

Laura Kane, The Canadian Press

Like us on Facebook and follow us on Twitter.

Just Posted

(File photo)
Poverty reduction survey identifies 10 poverty themes

Poverty reduction plan will be finalized in July 2021

Nanaimo-Ladysmith MP Paul Manly says he has no intentions of leaving the Green Party. (House of Commons image)
Island Green MPs have “no intention” of leaving the party after ‘heartbreaking’ departure

Manly, May only remaining Green MPs after Jenica Atwin left for the Liberals over internal disputes

New COVID-19 cases on Vancouver Island by local health area for the week of May 30-June 5. (B.C. Centre for Disease Control image)
COVID-19 cases drop again almost everywhere on Vancouver Island

Nanaimo had four new cases last week, down from 22 the week before

Justine Keefer’s Cedar Elementary School Grade 6/7 class put together a student paper, as part of a school project. Pictured here Andrew Gregory, left, Felix Leduc, Addison Armstrong, Lucia Walker and Anise Dick. (Karl Yu/News Bulletin)
Cedar Elementary School students create their own newspaper

Grade 6/7 class publishes Wolf Pack News as part of language arts and social studies

Évangeline Laforest and Oscar McClements’ invention La Méduse (the Jellyfish) removes oil from the ocean. The invention was one of 15 out of 700 inventions submitted to the Natural Sciences and Engineering Research Council of Canada’s Little Inventors contest. (Cole Schisler photo)
‘Little Inventors’ from Ladysmith showcased in national science challenge

Évangeline Laforest and Oscar McClements were one of 15 finalists in the Little Inventors Challenge

t
How to tell if a call from ‘CRA’ is legitimate or a scam

Expert says it’s important to verify you really are dealing with the CRA before you give out any info

Airport ground crew offload a plane carrying just under 300,000 doses of the single-shot Johnson & Johnson COVID-19 vaccine which is developed by the Janssen Pharmaceutical Companies at Pearson International Airport during the COVID-19 pandemic in Toronto on Wednesday, April 28, 2021. THE CANADIAN PRESS/Nathan Denette
1st batch of Johnson & Johnson vaccines won’t be released in Canada over quality concerns

The vaccines were quarantined in April before they were distributed to provinces

The rainbow flag flies beside the Canadian flag outside the University of the Fraser Valley’s Chilliwack campus on June 26, 2020. Monday, June 14, 2021 is Flag Day, and also June is Pride Month. (Jenna Hauck/ Chilliwack Progress file)
Unofficial holidays: Here’s what people are celebrating for the week of June 13 to 19

Flag Day, Garbage Man Day, International Panic Day all coming up this week

Terry Mazzei next to a truck after it was struck by lightning, with him inside, on Wednesday afternoon, June 9. He walked away from the incident without injury and the truck sustained only mild damage; a blown front tire and newly broken gas gauge. (Wendy Mazzei photo)
Vancouver Island man walks away unscathed after lightning strike

VIDEO: ‘We like to think that his dad was watching over him’

The courthouse in Nanaimo. (News Bulletin file)
Nanaimo man, already in jail, found guilty of sexual abuse of sons

Man previously sentenced for sexual interference involving girl in Nanaimo

British Columbia-Yukon Community News Association’s 2021 Ma Murray Awards were handed out during a virtual ceremony on Friday, June 10. (Screen grab)
Black Press Media winners take gold at B.C. and Yukon journalism awards

Publications received nods in dozens of categories

Forty sled dogs were seized by the BC SPCA from a Salmo kennel in February. A recent ruling has decided the dogs won’t be returned. Photo: Gounsil/Flickr
BC Farm Industry Review Board rules against Salmo kennel after 40 sled dogs seized

Spirit of the North Kennels was also ordered to pay BC SPCA $64,000

Prime Minister Justin Trudeau greets campers while visiting McDougall, Ont. on Thursday, July 19, 2018. THE CANADIAN PRESS/Frank Gunn
71% of B.C. men say they’d prefer to go camping with Trudeau: survey

Most British Columbians with plans to go camping outdoors say they’d prefer to go with Trudeau or Shania Twain

Members of the Department of Fisheries and Oceans’ Marine Mammal Response Program rescued an adult humpback what that was entangled in commercial fishing gear in the waters off of Entrance Island on Thursday, June 10. (Photo courtesy Marine Mammal Response Program)
Rescuers free humpback ‘anchored’ down by prawn traps off Vancouver Island

Department of Fisheries and Oceans responders spend hours untangling whale

Most Read