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The Vancouver Life Real Estate Podcast Episode 8 - July 2020 Market Update

Dan Wurtele

Living in Vancouver for the past 26 years it has been exciting to watch it grow into one of the most desirable cities in the world...

Living in Vancouver for the past 26 years it has been exciting to watch it grow into one of the most desirable cities in the world...

Aug 8 42 minutes read

July 2020 Real Estate Market Update

The July Real Estate stats are in and Vancouver continues to buck the trend and surprise us once again.  Prices are up for all property types and each one is also in a Sellers Market.  We look into the overall picture, go deeper into specific areas and then dissect the economic drivers that are driving these price changes.

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July 2020 Real Estate Market Update

Unknown Speaker  0:02  

Hi, and welcome to the Vancouver Live podcast. This podcast is created to answer the most talked about questions when it comes to navigating the Vancouver real estate market. I'm your host, Dan Martell, a licensed agent and accredited Real Estate Investment Advisor based here in Vancouver, and I'm joined by my co host Ryan dasht. I Dan I'm also a local realtor and exhausted father of two, husband of one and really happy to be here. Let's get right into today's episode.

Dan Wurtele  0:36  

Hello and welcome back to the Vancouver life real estate podcast. We are now in the first week of August and in July real estate market data is out and we are so excited to share with you today because it is really exciting numbers.

Ryan Dash  0:47  

Yeah, the market has really picked up. June was a tremendous month but July came out as even better. Just at a really really high level. We're seeing a lot of activity. Across all property types, especially the single family market and townhouses,

Dan Wurtele  1:05  

absolutely. So I think what we generally do here with our market data is we're going to start with gvrd as a whole, and talk about all property types combined. So just to dive right in here, average sale price of a typical Vancouver home last month $1,031,400. This is a four and a half percent increase year over year, meaning back in July of 2019, average home price was about $987,000 Wow, that's a significant jump. And I keep saying that every every year considering

Ryan Dash  1:35  

you know, the pandemic and the things we're going through, I find it absolutely fascinating. You know, the, the economy should be slower, or at least the housing market should be slower, but I think COVID COVID has really put a spotlight on property and and how people are using it and what they're thinking about it and going forward, right?

Dan Wurtele  2:00  

Huh, absolutely, we're seeing. Let's keep in mind here, too. This is all basically interprovincial and international property transactions. There's, you know, a decade low foreign investment coming into this into this area right now. Yeah. And of course, you know, we're at an absolute minimum of migration. So where's all this money coming from? Where's all this transactions coming from? It's all local deals that are happening. And I think kind of, like we touched on before, it's a lot of people have changed their interest and what type of property they live in now based on the realities of COVID,

Ryan Dash  2:31  

right, so there was already this pent up demand right before as we started the year off, I mean, like we've said before, we had a price correction that we were going through, over the last 18 months and then COVID happened. But as that was building, there was a lot of pent up demand, the prices dropped by, you know, on average, what we saw between 15 and 20%. And then you have buyers on the sidelines that have been jumping in and you know, as kind of COVID has Step back here and the province has reopened. We've actually really started to see a surge in buyers now.

Dan Wurtele  3:06  

You know, we started to see property prices bottomed out around summer, September ish of 2019. Yeah, so since then, prices have largely been on an incline. And you know, we started to see in the last couple months average property prices kind of plateaued and we even saw a bit of a dip in June. But the reality is, we just saw a point 6% overall property price increase in July one month and this actually takes us now to the average or the sorry, the highest average property price since November of 2018. Wow, we're at a 21 month high in property prices right now. That's that's pretty fast as a lot especially considering like we said foreign capital and migration is at you know, decade if not decades low.

Ryan Dash  3:51  

Totally. And if you actually look at the the region as a whole, not just Vancouver but the Fraser Valley. It's the best month in 3d Yours. That's it. Right. Yeah. Which is, which is a fascinating story.

Dan Wurtele  4:04  

And when we say best, we were talking about the highest sales volume. That's right, you know, and yeah, and best or highest priced in that was 21 months. Yeah, as

Ryan Dash  4:12  

well. But it doesn't end there. Because actually, you know, I believe we were up 9.4% in terms of total sales volume compared to the 10 year average.

Dan Wurtele  4:24  

And that's, that's a big indicator, right? Because Sure, we've been coming off of low basis points for for what months and years now, essentially. And that's why, you know, all these bigger numbers weren't all that exciting, but to see us at almost nine and a half percent above a 10 year average. That really does speak volumes. Totally, no pun intended. Okay, so But yeah, 36 month high and 22%. Higher than last year.

Ryan Dash  4:49  

Yeah. Which that's that's big. Considering everything that 2020 has thrown at us.

Dan Wurtele  4:54  

Yeah, we're talking you know, over 3100 homes were sold last month and with our average sale price that we just talked On what $3.4 billion in real estate sold last month? Is that it? These are big numbers. I think these numbers shocked everyone. Yeah, I don't think anyone even as as bullish as some people were, as much as you can be looking at a global pandemic, I think these numbers are surprising, everybody, I would agree. I think

Ryan Dash  5:21  

what's what's interesting is I was actually out with a client the other day, and when I was talking about the numbers, you know, he even wondered if, if they were going to get even better, because things potentially get worse than other places around the world. Yeah. Which is, which is a concept that, you know, I don't really think I thought too much about, but as things you know, potentially get worse in the States. Are we going to see more requests for immigration and things like that from from the States, not just say, from Hong Kong or other places around the world? Right,

Dan Wurtele  5:51  

I would think absolutely. And I even have a few examples of exactly just that. Yeah. You know, a very close personal relationship of mine is trying to get out of the states for many reasons, but you know, Vancouver has never looked better from their standpoint.

Ryan Dash  6:02  

Yeah. And further to that, you know, we've got family members and friends that are in San Francisco, that literally work for some of the biggest tech firms in the world. And they no longer need to be in the states not just go into the office anymore. They don't even need to be in the states anymore. So we're seeing now families that were down there on work visas are coming back, right. So there's, you know, they're going to be looking for places they're going to be looking for homes.

Dan Wurtele  6:28  

And these things to the the rate of increase is absolutely increasing. Right now, meaning that in the second half of July, it saw a 40% increase in sales over the first half. Wow. And the same thing happened in June. Yeah. So we're seeing this, like straight upward trajectory of increase in sales volumes. And yes, we're in the first week of August, in the first seven days, 600 properties sold. So we're on pace to do very similar numbers to what we just saw happen in July. Yeah. So if you are looking for property, it's time to get in there.

Ryan Dash  7:01  

You know, it's, we've seen we've seen behavior like this before. You know, so if you are thinking about getting into the market, you're thinking about buying, it is time.

Dan Wurtele  7:12  

So I think also part of what is driving this increase in sales is the increase in inventory. You know, because you need good homes to sell for people to want to buy them you do. A lot of homes that aren't as attractive or desirable are going to sit but the well priced homes in good areas in good condition there. As we've just noted, they're pretty much flying in the first week.

Ryan Dash  7:32  

Yeah. However, with that being said, when you compare the increase in supply that we currently have based on last year's July, we're actually down by 15%.

Dan Wurtele  7:42  

So overall inventory while it's finally increasing off of a very low baseline, we're still well below the 10 year average. Yeah,

Ryan Dash  7:48  

exactly. So why don't we jump into some of the property types here?

Dan Wurtele  7:54  

Yes, we will. But just before that, we definitely need to point on this sales to active listings ratio or is at 26% 25.9, but 26% and that's the average for all property that's all combined. And do you realize that means all property types are currently in a seller's market. And you know, the the ratio basically says anything above 20%. You can expect upward pressure anything above 20% is a seller's market. Also up 9% over last year, as far as the sales active listings ratio goes,

Ryan Dash  8:25  

Yeah, and that's always guys the leading indicator to price right. So as volume continues to move up and supply, while it is increasing month over month, it's generally down year over a year. The next thing we're going to see the next pressure point is likely going to be price which we've started to see. started to move.

Dan Wurtele  8:45  

Exactly. So let's do a little bit of a deeper dive like you mentioned. So we largely transact in Vancouver, east and west. So we'd like to kind of share some numbers for those regions. Let's start with Vancouver West and let's start with detached homes.

Ryan Dash  9:00  

July 2019, saw a average sale price on the west side of Vancouver for detached homes at 2.94 6 million. We have seen an increase of about $107,000 year over year to a new average price of 3,000,053.

Dan Wurtele  9:15  

That's three and a half percent increase year over year. It hasn't been a steady rise. But overall I'd say what nine of the last 12 months have been upward as far as your your prices go in the Vancouver West detached market. That's right.

Ryan Dash  9:32  

Now, if we actually look at the quantity that sold July 2019, saw roughly 80 homes sold. And in July 2020, we saw 77. So, you know, a small change in terms of variance. But but really a moot point.

Dan Wurtele  9:49  

Pretty much balanced. Their listings are up though, which is great. We're about 16% year over year. This this put 214 new detached homes on the market last month, right

Ryan Dash  10:00  

And but this is even though that number has increased your total inventory compared to last year, as we've already talked about, is actually down by about 26 and a half percent. So where we were at last year for July was 741. Homes for sale. We're now down to 545.

Dan Wurtele  10:21  

And that's always going to be a driver of upward pressure on prices. Yeah, low inventory means people are basically battling for what is out there.

Ryan Dash  10:28  

Yep. And then the sales ratio at 14.1%.

Dan Wurtele  10:33  

There you go. So that is considered balanced.

Ryan Dash  10:36  

That's right for that market for that property type. However, even though it's a slow, long look at it, you look at you know, the year but from before and we were at 10.8%. So the trend is on the way up, slow trend, but it's a trend on the way up,

Dan Wurtele  10:50  

okay. Okay. So we went from basically sellers into sorry, from buyers market to balance marketer in the last year act. Yeah, got it. Okay, let's look at townhomes. Now for the same area. Vancouver West,

Ryan Dash  11:00  

right? So, last year, we were at 1.1 4 million for your average price point. And now we're up about 2.2% to 1.139. So a change of about 25,000.

Dan Wurtele  11:13  

Okay. Okay, so a decent increase there. You know, again, people are still up from where they were a year ago.

Ryan Dash  11:19  

Yeah. It seemed a little bit more maybe evolved in terms of up and down. But the actual change in price hasn't been all that big.

Dan Wurtele  11:29  

Gotcha. And when it comes to the other stats, Vancouver, West townhomes are acting very similar to Vancouver West detached homes. Yeah, where we saw literally no change in home sold from a year ago at exactly 48. So very consistent there. A slight uptick in new listings, you know, we had 102 new listings last month, which is almost a 13% increase. But again, inventory 22% down in inventory over last year.

Ryan Dash  11:54  

Yeah. Yeah. And then the sales ratio again is climbing steadily. But this is Is it a little bit different? Because we are seeing actually now a sales ratio that went from a balanced market last year to a full on seller's market at this point. There you go, you know,

Dan Wurtele  12:10  

up about 5% over last year.

Ryan Dash  12:12  

Yeah, we're at 22% sales ratio now. So just before we jump into the next property type, again, why do you think stats for townhomes are very similar to stats for single family? Is it because the consumer is essentially seeing a similar product that maybe at a different price point?

Dan Wurtele  12:32  

That's exactly the demand to kind of move up or move into that type of property? Is I'd say equal and it's just about affordability. Right. Obviously we're talking about a big difference in price point. Yeah, you know, by literally a couple million bucks here, but people that want to have a little chunk of land, they want some outdoor space, they they want a home but maybe they're in the townhome bracket as far as affordability goals. So both of them are you know, similar demand. It's just a matter of Weiss available on price point. And again, that's Thank you for West.

Ryan Dash  13:01  

Yeah. And that's I think that's in line with the move we've seen in terms of the way buyers have changed behavior. Right, exactly. Okay, let's look at condos because condos are very interesting right now.

Dan Wurtele  13:13  

Thank you for West condos. year over year is sort of the first number we'll look at. And it as well as up actually it's up 5.3%.

Ryan Dash  13:22  

Yeah. And this comes as a bit of a surprise to me. Probably to a lot of people yeah. Mostly become, you know, as a typically as other property types gain interest or gain in popularity, something typically has to fall, right. But here we're seeing, you know, even interest rise across all of the property types and condos are showing a similar bump and gain that the rest are.

Dan Wurtele  13:48  

That's exactly yet so, you know, we're up about $42,000 year over year, which you know, we're at 794,000. That's pretty impressive. A year ago, that same condo was 752,000.

Ryan Dash  13:59  

Yeah. And if we look at the year over year changes in terms of how many sold in July 2019 versus this year marginal change of about 4%. down right, so 353 sold last year 339 sold this year.

Dan Wurtele  14:16  

Okay. But new listings? Yeah, we're definitely seeing a spike in new listings here.

Ryan Dash  14:20  

Yeah. And that's it's a big one, right 30% increase year over year,

Dan Wurtele  14:25  

people, we think are largely offloading condos to move into your townhome and when possible detached market? Yeah, very much. So. We're still, you know, we're still below 10 year average, as far as inventory. We're almost the same as last year. But again, we are seeing a two three month spike in listings in this property type. I think that's going to continue. Yeah.

Ryan Dash  14:48  

This sales to active ratio, though, is something that Dan and I have been talking about now for a few weeks, we've kind of identified that. We do believe that while condos are up Overall and still quite healthy, they are trending down. Right. And, you know, the sales ratio this time last year for condos was 21.3%. And this year, it's only down 1% to 20.3%. But it's still a trend down. Yeah, right. And something that is not going the same direction as the other property types.

Dan Wurtele  15:19  

That's it. So definitely something to pay attention to. We'll quickly touch on the reasons. Again, we think people are trying to move out of condos for strata and insurance reasons and also livability reasons. If you live downtown, because you want to work or sorry, walk to work. Now you can work from home. So you want to double your square footage for the same price. You know, people are certainly leaving the condo market for larger properties we're seeing

Ryan Dash  15:42  

and that's not just subject to Vancouver. That's we're seeing that across its global. Yeah,

Dan Wurtele  15:47  

absolutely. Getting

Ryan Dash  15:48  

in every a lot of cities, right.

Dan Wurtele  15:51  

Cool. That's Vancouver West. So let's now dig into Vancouver east. Again, we'll start the top with a detached market which I'd say Yeah, Vancouver East detached homes are probably the most sought after property type in in gvrd. Right now.

Ryan Dash  16:06  

Yeah, I think if you've got, you know, healthy capital and you're looking for a decent investment, this is this is your your asset class right now?

Dan Wurtele  16:14  

Yeah, we're looking at 13 straight months of property price increases for the detached market in Vancouver east. year over year. We're at 8.9%. Wow. big number. I mean, that's, that's $132,000 change since last July.

Ryan Dash  16:30  

Yeah. And how robust is that, considering, again, that we've done that in a pandemic?

Dan Wurtele  16:37  

pandemic right. years ago, you could buy these homes for 1,000,003 55. Yeah, now you're at 148 7,487,000 for that same home a year later.

Ryan Dash  16:47  

It's funny. You look at that price correction that as it came down, and then you know, people started jumping in the early part of the year and then oh my goodness, the pandemic instead of it literally falling off a cliff again, it actually went the other Either way, continue to rise, arguably at an even I mean a flatline for a little bit, but then it started to rise faster than it was going before, which is, which is very interesting,

Dan Wurtele  17:11  

very impressive numbers. So let's now look a little deeper at the other stats that are happening and what's driving this upward pressure in prices. Totally. Okay, home sold. I mean, we're seeing 26% more home sold than last July.

Ryan Dash  17:24  

Yeah. So by comparison 104 homes sold last year in July 2019. Vancouver east and we're seeing 141 that have sold this month or July. That is right. Yep. Newly listed is up as well as sellers all recognize that they're getting good money for their homes. So they're starting to put them on the market here. New supply is up by 18 and a half or 18.8%. Nearly 19% year over year.

Dan Wurtele  17:50  

Hmm. There is again the big driver of upward pressure and prices. Yeah. 38% decline in inventory over last year.

Ryan Dash  17:57  

Yeah, that's if you'll ever Want to know why home prices go up? its lack of supply. Mm hmm. Right, especially now, you've got pent up demand, you've got an asset class that, you know, if you can afford this and it's going to change by 8% in a year, you're looking at a minimum of $100,000 that you're going to make, right? And that's just looking at it from an investment perspective, let alone your lifestyle perspective, which is what a lot of people are moving towards now. And and valuing that, or sorry, pricing the property according to how they're going to live their life there, right.

Dan Wurtele  18:35  

Just to kind of break that down to the hard numbers here last year, if you're shopping for a detached home, in Vancouver east, you had about 711 properties to look at same time this year 439. Just that's a lot less huge reduction. And of course,

Ryan Dash  18:52  

the sales ratio is a huge talking point because this is one of the biggest we've seen for this month, and a huge huge jump to so July of 2019 we saw a very balanced market for this asset. 14.6% we are without a doubt in a seller's market at 32.1%

Dan Wurtele  19:11  

it jumped more than doubled 17 and a half percent increase in your sales to active listings ratio. 32%. Well in a seller's market, we hear all the time that anyone offering on a detached home in that area, almost guaranteed to be in multiple offers right now.

Ryan Dash  19:26  

Yeah, well, to this point, last month, we did a deal above two and a half million and it sold in one day on

Dan Wurtele  19:31  

the market. Right. So there you go. There's there's less than three months of supply for this property type right now in that area.

Ryan Dash  19:38  

Yeah, so you're going to continue to see some price bumps there. Okay, let's check out some townhomes.

Dan Wurtele  19:44  

townhomes acting a little differently. This one's a bit of a surprise to me. Yeah. up year over year. Great. The average townhome last month about $888,000 to purchase. This is up 3.6% or 32,000 from a year ago. But if you do have a look at this chart, you know, we are on somewhat of a downward trend for about the last six months. Interesting.

Ryan Dash  20:06  

Yeah. And I have a few thoughts as to why that could be the case. I think for one, a single family home in East Vancouver is significantly cheaper than a single family home in West Vancouver. And likely, if you were looking for a home, and you were thinking about West Vancouver, you can afford certainly in East Vancouver. So I'm wondering, you know, if we're actually seeing customers that would typically have bought on the west side, now buying on the east side, right? To if you look at single family homes that actually have a suite as well, and you can gain $2,000 a month in income that increases your borrowing power significantly. So if you were at the million dollar price point, you know, or you were looking at a nice townhome, and you realize now that you can actually get up to 1.3 with with a helper, maybe now you're thinking of making that job, especially When prices are or sorry, interest rates are at record lows,

Dan Wurtele  21:04  

right? That's just sitting, let's say that's your your budget. And you're like, well, we could go townhome and Vancouver West. But look, we can go detach it. Maybe we're east. Right. And for some people, maybe that's far more appealing.

Ryan Dash  21:14  

I think so, you know, I think based on all the thoughts, all the stuff we've just talked about in terms of why people are buying property, I really think it falls in line with that.

Dan Wurtele  21:23  

There you go. So, home sold, townhomes sold last month 17% increase, which brought it to 29 units. Yeah. Newly listed had a big jump, though. Yeah. We saw 75 townhomes listed last month, which was almost a 50% increase year over year. Yeah, that's that's

Ryan Dash  21:38  

pretty significant. Also might have something to do with softening numbers in terms of price point, right course supply. There you go. It's coming up. Right. Definitely offer a low baseline, of course,

Dan Wurtele  21:47  

right, because we're still seeing even after that jump inventory is basically a push from last year. Yeah. 97 units available. That's right, which is Yeah, it was 101 year before so relatively no change there.

Ryan Dash  21:59  

However, The good The good news is that the sales to active ratio is up and trending up. Right. So we're at a sales to active ratio of 30% here, which is still quite an active seller's market.

Dan Wurtele  22:12  

Yeah. So sales ratios and sellers, but we're seeing slight downward pressure on prices, which is contradictory to what we're normally used to seeing.

Ryan Dash  22:21  

Yeah, it's a bit of normal in terms of your fundamentals. But again, like Dan said, when you've got asset classes where I was buying a townhome on the west side, maybe I can buy a different asset class on the east side for similar money. I think that's where we're seeing our gap in in data here. Mm hmm.

Dan Wurtele  22:38  

Okay, so let's look at condos now in Vancouver east. Alright. Again, prices are up. So for four and a half percent over last year, yeah, bringing your average Vancouver East condo price to four sorry, $590,000. Right up 26,000 from a year before.

Ryan Dash  22:54  

Yeah, which is which is great performance, and actually starting to buck the trends that it's been doing for the last Three or four months?

Dan Wurtele  23:01  

Yeah, again, we know price is a lagging indicator here. And once we saw prices flatline and start to dip, it really led me to believe that I that prices would probably continue downwards. But here we go July has just bucked that trend. You know, we're lagging indicator. I mean, these are pandemic prices, let's call it right like we're not seeing a collapse by any means. And now that we're seeing an uptick and we're up in all assets across the board here, it's it's really fascinating and something to pay attention to.

Ryan Dash  23:31  

Yeah, I mean, Vancouver is doing its Vancouver thing.

Dan Wurtele  23:36  

The trend yet again. So sold 156 condos sold last month in Vancouver east. Definitely an uptick. Yeah. Yeah. That's impressive. And here we go. We're talking about new inventory, just like Vancouver West, almost a 37% increase in newly listed condos over last year. Yeah, but inventory almost exactly. It was a year ago. Yeah. So low baseline. People are finally listing and new listings are selling.

Ryan Dash  24:05  

Yeah. And people are getting decent money for them. Right. And I think that's why we're seeing the surge in listings as well. Very healthy sales to active ratio very similar to townhomes at 30.4%. Again 5.8% from the year before,

Dan Wurtele  24:21  

okay, that is the resale market for East and West. What we also like to touch on too is a little bit of insight into the pre sale market. This is a market that could not have been harder two, three years ago, but has been hit extremely hard. Yes. And have seen sales obviously, decrease dramatically, you know, more so than the resale market. That said, it is it is picking up unquestionably very similar to last month, the pre sale market saw a 14% sell through rate. So there were about 221 units newly brought to market last month. 14% of those are selling June there were seven new projects, July six projects. And August, we are expecting another six projects to come online for the

Ryan Dash  25:08  

and that that will equate to roughly another 600 units that will hit the market.

Dan Wurtele  25:14  

combined. Yeah, screens lined up to 2330 a month ish. Yeah. So I mean, honestly, developers are still holding back, understandably, right. We would normally see almost maybe double the amount of projects coming online right now, but they're watching the market too. Right. They're not going to release product into a market that does not have demand for what they're selling.

Ryan Dash  25:34  

Totally. But we are seeing that demand increase. Yeah, right. Especially for I think bigger properties as well.

Dan Wurtele  25:41  

Right? For sure. Yeah. townhome. presale certainly have demand right now. So people that are developers rather that are sitting on that potential inventory may be inclined to release that as sooner than later now, and you know, again, it will be good. But should these resale numbers continue to uptick at this pace? I think We will see some significant release of new condo projects and townhome projects from developers come online in the fall and winter.

Ryan Dash  26:08  

Cool. Okay, well, should we talk about our notable property of the month, which is seriously notable?

Dan Wurtele  26:17  

Yeah, this is a fascinating one. And I think, to even frame this, I'm going to get started by saying in 2020, there have been 26 homes that have sold over the $7 million price, right. What is most fascinating is eight of those sold in July.

Unknown Speaker  26:38  


Dan Wurtele  26:39  

that's like, that's 30% Yeah, right there and one right there. So and this is local money, most likely doesn't appear to be too much foreign investment. You know, there will be some but not too much. Yeah. It's not immigration money coming in now, because these are local. So yeah. So eight of the most expensive homes sold all year, were sold last month,

Ryan Dash  26:57  

right. These are people that were thinking about getting A lot of space.

Dan Wurtele  27:01  

Yeah. And so the notable property of the month. beautiful home. Yeah, this is a Shaughnessy home. 1389. The Crescent is the address if you want to look it up. This home was listed for $17,280,000. It went into multiple.

Ryan Dash  27:22  

It received two offers, which is incredible at that price point.

Dan Wurtele  27:26  

Yeah, on the same day, it's sold for over asking price. That's right. It's set a record. This is the highest sale price on the MLS for all 2020. Again listed for 17 to 80. It's sold for $17,400,000.

Ryan Dash  27:40  

Yeah, and believe me if you can get onto Google and see the pictures, go and look. This is a hell of a property. But that aside, what we're really talking about is we're looking at multiple offers at the $17 million mark in a pandemic. environment.

Dan Wurtele  28:00  

Yep, yep. And again, another eight homes that sold up to over seven to this month. And for all those people that like to think assessed value is market value. This home sold for 5 million over the assessed. Start. So it's just again, right. We've talked about it a lot. And, you know, people imagine coming in here and thinking would make me an offer at assessed value.

Ryan Dash  28:21  

Yeah, it's, um, it really is a simple tax indicator, right? It's, it's really, it only has a very little bearing on on the actual price of the property, especially in the luxury market.

Dan Wurtele  28:34  

Mm hmm. Okay, so what is also driving prices, mortgages and interest rates, cheap rates, cheap rates, so the Bank of Canada has basically come out and Governor Tim Laughlin has come out and basically said, we are going to keep interest rates at the absolute rock bottom for the next two to three years.

Ryan Dash  28:52  

Yeah, I mean, he actually used the word unusually clear.

Dan Wurtele  28:55  

Yeah, I when's the last time Bank of Canada all but guaranteed For two to three years Oh,

Ryan Dash  29:01  

yeah. I actually think it's a really smart move in terms of helping people get their investments together, and whether it creates some stability, right. And that's we, as we know, more than more than most that if you can create a stable environment for money and investment, you'll drive business. Right. And I think that's very much what they're trying to do here.

Dan Wurtele  29:23  

Mm hmm. The Bank of Canada is doing what they can to stimulate this once in a lifetime economy. Yeah. country's in trouble in some senses of the word. And they're doing what they can to say, look, it's if you want to borrow money to make a large purchase right now, we'll do our part by keeping your interest rates low and so affordable as they can

Ryan Dash  29:40  

Yeah, ultimately, they have, you know, 82 billion plus to pay back, right. And by keeping interest rates low, you encourage spending and you encourage investment. And there's tax dollars there, right. So it's in everyone's interest, I think to have those rates low, so that we can continue pressing Word, especially in the real estate market,

Dan Wurtele  30:02  

banks are following suit. Last month, we saw HSBC come out with a 1.99% interest rate mortgage. Yeah, I guess what I heard today was that the TD is offering a 1.69 variable. I mean, that's why on my lifetime, in my lifetime has had been that low. Why would you not take that? It's pretty enticing.

Ryan Dash  30:24  

It's relative. I'm never gonna say free money, because it's not a thing. But it's pretty close.

Dan Wurtele  30:31  

Yeah, imagine borrowing money at your 1.69%. Yeah. And what did we just see the average house is up four and a half percent every year? Yeah.

Ryan Dash  30:39  

Well, you're making money on your borrowed money.

Dan Wurtele  30:41  

That's what the idea is, right? And that's,

Ryan Dash  30:43  

that's a that's a low number. If you're in you're in Vancouver, East and you own a detached home, it was more like eight and a half 9%. Right. Anyways,

Dan Wurtele  30:55  

cool. So I want to touch now on Canadian employment. So these Numbers sort of just came off the press here earlier this morning. So I'm gonna have to look over and reference them. But employment in Canada grew by 419,000 jobs in July. Combined with May, which had 290,000 in June at 953. We're looking at an increase of 1.3 million jobs in the last three months.

Ryan Dash  31:22  

So it's interesting number, I guess what I want to ask is, are those a lot of those jobs? Are those people returning to work? Well, of course, yeah.

Dan Wurtele  31:31  

These aren't really new jobs. These are jobs that I think were on hold that are now back. There you go, right. But here you go. We lost bout 2.62 point 7 million jobs in March and April, full time jobs, two months, you know, decrease, but now we're seeing a three month recovery where 50% of those jobs are back

Ryan Dash  31:51  

Yeah, in three months. And that's likely due in part to a lot of companies actually telling their employees look, we got to work from home, right? We got to figure out a way to keep working here and And, you know, with the repurposing of real estate, you're seeing people getting their jobs back, or at the very least figuring out how to get back to work.

Dan Wurtele  32:06  

Mm hmm. The industries that are leading these jumps are actually accommodation and food services. Right. So we saw a lot of delivery hotels, yeah, food, of course, restaurants are three open. Yeah. This was followed by information, culture and recreation. So people that you know that maybe they're not traveling to Europe for their summer vacation, but they are doing something locally rental boats. There you go.

Ryan Dash  32:30  

Yeah. I think actually, we did that. Anyways, yeah. So Canadian employment is definitely coming back. mortgage rates are very low prices are climbing.

Dan Wurtele  32:46  

We can touch on the retail sales as well because I found this one very interesting. The clothing sales is leading the retail recovery. Interesting. Yeah, they saw something like 116% increase in sales. from the month before,

Ryan Dash  33:01  

that's, that's great news that's putting people back to work and and that's people spending again, right? Yep, that's what we want to see.

Dan Wurtele  33:09  

Following that was your sporting goods, you know, your hobbies, that kind of things, books and music, which is great again, people are keeping themselves entertained. Yeah. At home, right. Yeah. And, and this one, I found it interesting to the third letus or sorry, the third leading retail sales industry was home furnishings.

Ryan Dash  33:29  

That actually doesn't surprise,

Dan Wurtele  33:31  

right. People want to improve their living space. Yeah. So let's say maybe you can't make a lateral move or move to a larger home or whatever, is interesting. You, but you're going to take your space and you're going to beautify it. Yeah. Because you're stuck there. Yeah.

Ryan Dash  33:43  

Are you gonna make it more efficient? Are you doing something to that effect?

Dan Wurtele  33:45  

Yeah. Okay, so that basically wraps up our market data report for what happened in July and the sort of economic drivers of what is causing these numbers that we are seeing. So Ryan, what, what's what's gonna happen next, what should we expect for Let's see the next quarter the next three months here, I'm just going to rub my crystal ball first. Because now

Ryan Dash  34:07  

I really think, and I still hold to this that trains project even further than three months at this point, as we're discovering with new stats coming out on the monthly, it's difficult, right to be accurate right now. So projecting further than that doesn't make a whole ton of sense. Besides, you know, when you do look at maybe some of the notes from Canada's top doctor, we don't really know what's going to happen with COVID. come November, December, it's going to get a little different. It's going to be a bit more of a battle. So that being said, if we just look at the next three months, you know, I think a lot of what we've seen in the last two months, we're going to continue to see in the next three months here. You're going to see people that are still going to be putting their condominiums on the market trying to make a bigger jump into townhomes if they can into single family markets, people that were thinking about buying On the west side and a townhome may consider a full size home, on the east side, I don't think you're going to see a huge change in the borders with the amount of people coming through right now. Certainly, with cases still doing what they're doing in the States. I just I don't see that opening up. So I think what we're gonna see over the next three months is Vancouver dealing with its pent up demand, and a lot of buyers making the changes that we've just talked about in the podcast, right.

Dan Wurtele  35:29  

I think, of course, the Bank of Canada, government banks, they're all going to continue to keep the housing market elevated. They're going to do what they can to support it. That's right. So I think we're seeing people take advantage of that knowledge. Yeah, you know, they feel like okay, now if I buy now, I get this low rate. We've seen that the powers that be are really going to try and not let prices fall now. And I think, you know, sure we've got the mortgage deferrals are gonna come to an end soon. Yeah, again, I think Those who truly need it might even get an extension. So I do not expect to see any kind of Cliff action there where suddenly we are flooded. Sorry, we have flooded properties into the market because people can't afford their payments anymore. Again, most jobs are back. And let's keep in mind that the jobs that are back were largely for the lower wage income earners. You know, these were largely not property buyers in the first place.

Ryan Dash  36:24  

So is it potential is there potential to see maybe rental values come back a little bit here? Or are we going to continue to see that depressed for for a little bit locally,

Dan Wurtele  36:32  

I think what's going to change rental rates is if people take back their Airbnb properties from their long term renters, right, you know, it's again, it's always going to be supply. So everything that's there right now supply is I believe, at a three year high. So rental rates, understandably, have come down. Yeah. So what will change that? Well, you know, we don't see tourism anytime soon. It's all going to be you know, inter provincial tourism like we're seeing right. That's why massive jumps seeing right now in India. Like cabin Ray and vacation sales pretty, these are selling 20 30% higher than they were last year dollar dollar value and

Ryan Dash  37:06  

that that to me, honestly doesn't surprise me at all. Now that's just a function of people trying to do something and not sure what they're gonna be able to do for the next few years. Right. Yeah, so I think you know, drivers being low rates, pent up demand, lower supply even though it's up month over month. I really think a lot of what we've seen we're going to continue to see for the short run.

Dan Wurtele  37:31  

Thank you guys so much for listening. Any questions comments, please leave them below and thank you as always, listening and watching and see you next week.

Unknown Speaker  37:39  

That wraps up this edition of the Vancouver life podcast.

Dan Wurtele  37:44  

For more information on this podcast and to access a ton of free downloads, investment opportunities, current market info and homes for sale. You can find it all at WWW

Unknown Speaker  37:54  

dot Vancouver

Unknown Speaker  38:00  

Thanks and we look forward to bringing you more podcasts about Vancouver real estate

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