In May, home prices in the Greater Vancouver area increased 5.2% year-over-year to an average of C$1.11 million (US$840,000), as housing supply could not keep pace with strong demand, according to a report out Tuesday by the British Columbia Real Estate Association.
Meanwhile, the number of sales dropped to 4,425 units, down 9.9% from a year ago. But sales-to-inventory ratio was 52%, meaning more than half of the 8,816 homes on the market during the month were sold, according to the association’s monthly report.
Generally, a sales-to-inventory ratio in the range of 15% to 25% suggests a balanced market. Any ratio above 25% indicates an upward pressure in home prices.
The market condition in Greater Vancouver area was representative of the entire province of British Columbia. In May, there were 12,402 residential sales recorded by the the province’s Multiple Listing Service, falling 7.9% from the same period last year, while average home prices reached C$752,536 (US$568,875), a 4.2% increase year-over-year.
“Market conditions have tightened considerably this spring as an upturn in consumer demand has not been accompanied by a rise in homes listed for sale,” said Cameron Muir, the association’s chief economist.
According to Mr. Muir, the supply of homes for sale in the province has decreased 50% over the past five years. With a shortage of housing supply, home prices will continue to trend higher in the near term, he added.
Total active listings in the province were down 11.1% to 28,404 units from May 2016.
— Mansion Global (@MansionGlobal) June 6, 2017
Victoria, another hot housing market in the province, saw an 15% increase in home prices in May, averaging at C$674,237 (US$509,993). Sales dropped 22.3% to 956 units. The sales-to-inventory ratio was almost 70%, suggesting that seven out of homes listed were snapped up in the month.
Separately, a report released earlier this month by the Real Estate Board of Greater Vancouver showed benchmark home prices in Metro Vancouver reached C$967,500 (US$731,817) in May, an 8.8% increase from a year ago. Compared to April, it was up 2.8%.
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