Robert Price: Could COVID be the catalyst for Vancouver’s red hot real estate market to finally stabilize?
For Canadians, COVID-19 instantly and radically changed many aspects of our personal and professional lives. We have dealt with waves of opaque regulation changes, uncertainty, and living in a constant state of flux. These momentous waves have significantly impacted the real estate market in Canada. Within Vancouver we have seen historic drops in inventory and record-breaking prices with the benchmark price of detached homes reaching a staggering $1.8 million.
As we look to the year ahead and attempt to answer the burning question of when the Vancouver market may stabilize, we need to explore what changes in home-buying preferences have shifted due to the pandemic and how they will impact us in the long-term.
Many home buyers who have historically valued professional and social proximity to others have abandoned those preferences completely. Commuting length has long been a significant driver of location value. Now, with many employers electing for permanent work-from-home options — commute length is of far less significance. Proximity to friends and entertainment has shifted to a preference for larger homes and more space.
The question is, which of these changes in buying behaviour are short-term, which are permanent, and what is their effect on real estate in Vancouver?
Since the beginning of the pandemic, Canada has experienced a shift in housing preferences toward single-family homes as home buyers seek larger properties and more space. From April 2020 to February 2021, the Bank of Canada has seen a dramatic 26 per cent pricing change between condominiums and single-family homes. Previously mirroring each other, the start of the pandemic created an exponential separation of demand, and in turn price, with single-family homes increasing by 22 per cent and condos dropping by four per cent.
A recent poll by market research company Cashew revealed that 56 per cent of Canadians want more living space, larger homes or more outdoor space, which in many cases means moving away from the downtown core. The Bank of Canada also revealed that in Canada’s largest markets, Toronto, Vancouver, Montreal and Ottawa, the trend toward wanting more space away from the city centre is remarkably similar, with Vancouver residents moving the furthest distances away from the core.