Fraser Valley Real Estate Board transactions broke another record in June as realtors sold the most apartments ever in a one-month period.
In 30 days, 683 transactions were completed, representing 27% of all sales activity. This was an increase of 13.1% compared with apartment sales in June of last year and 12.2% compared with May 2017.
The record-breaking month was led by Surrey, where 345 apartments were sold, followed by Abbotsford (149) and Langley (121).
July followed a similar trend, as 544 apartments sold, representing the 12th consecutive month attached sales have outpaced detached sales in the region. Jeffrey Anderson, CEO of Surrey real estate company Exceeds Inc., said the price gap between types of homes has widened substantially across the Lower Mainland. He noted the price of detached homes is pushing more buyers to seek alternative property types.
“There’s such a disconnect between single-family and multi-family,” Anderson said. “So basically people are saying, ‘Well, I can’t afford single-family anymore, so now I have to look at multi-family.’ And then you have all these townhouses and multi-family developments popping up everywhere.”
Anderson said it’s likely that within the next 18 months, there will be a “soft correction” of prices across the Lower Mainland, due to multi-family developments scheduled to hit the market all over the region.
The benchmark price for a detached home within the Fraser Valley Real Estate Board’s (FVREB) jurisdiction is $966,000. This is a 3.4% increase compared with June 2017, and a 10% increase compared with July of last year. Within the Real Estate Board of Greater Vancouver’s (REBGV) jurisdiction, the benchmark price for a detached home is $1,612,400. This is a 1.9% increase from July of last year and a 1.5% increase compared with June.
FVREB president Gopal Sahota said apartments south of the Fraser River are still offering a way to get into the housing market. The benchmark price for an apartment or condo in the region is $341,100.
“Compared to Vancouver, it is quite affordable,” he said.
The benchmark price for an apartment within the REBGV’s jurisdiction is $616,600, almost double the price of its FVREB counterpart.
Sahota said Vancouver’s real estate boom has directly fuelled the Fraser Valley’s rise. “It’s a ripple effect for sure.”
Re/Max realtor Matt Morrow, who has been selling in the Fraser Valley since 2005, agrees with Sahota’s assessment.
“It makes perfect sense,” Morrow said. “And it’s the trickle-down effect from soaring house prices, which fell through into townhomes and then eventually the condo market. In some cases it’s the only thing people can afford; investors are still buying in as rental values have gone up.
“It’s the Wild, Wild West out there; multiple offers are almost a guarantee – and offers without conditions to financing, inspection and in some cases without people even reading the strata documents.”
Two years ago, the average number of days it took for an apartment to sell in the Fraser Valley was 66, according to FVREB statistics. In July of this year, that number dropped to 16. Between 2007 and 2015 the benchmark price for an apartment in the Fraser Valley remained relatively stable, hovering between $200,000 and $215,000; however, that has risen well over $100,000 in the past two years.
The sales-to-active-listings ratio for Fraser Valley apartments reached 97% in June.
According to the REBGV, an area is deemed a “seller’s market” when the sales-to-active-listings ratio is 20% or higher, and a buyer’s market is when that ratio is below 12%. Sahota noted one of the hottest markets within Surrey now is South Surrey and White Rock, where the benchmark price for an apartment is $434,900, and where there has been a 25% increase in listings over the past year.
“You’ve got Morgan Crossing; you’ve got the outlet malls there; you’ve got a pedestrian lifestyle. It’s a great place, and it’s got everything – big-box and boutique stores.”
REBGV president Jill Oudil noted in a July press release that homes, once the driving force of Vancouver’s hot market, have cooled substantially.