Why have Vancouver’s housing prices remained stable during the pandemic?
The COVID-19 pandemic has reduced activity in Metro Vancouver’s housing market since mid-March, but home prices have remained steady throughout the last 12 months.
Let’s take a closer look at recent home price trends.
The MLS® Home Price Index (HPI) composite benchmark price for all residential properties in Metro Vancouver today is $1,028,400. This is virtually unchanged from April 2020, a 1.4 per cent increase over the last three months, and a 2.9 per cent increase compared to May 2019.
By property type, the HPI benchmark is $1,456,700 for detached homes (0.3 per cent increase from April 2020), $792,700 for townhomes (a 0.2 per cent increase from April 2020), and $686,500 (a 0.3 per cent decrease from April 2020).
So why have home prices remained steady over the last year?
Beginning late last year, home buyer activity was increasing and the number of sellers listing their homes for sale wasn’t keeping pace. This was putting upward pressure on home prices.
This trend continued through to mid-March when the province declared a state of emergency and provincial health officials put physical distancing restrictions into place.
While these restrictions caused demand for homes to decline significantly in the short term, the number of homes listed for sale also saw similar declines.
Supply and demand drive home prices. If the supply of homes for sale declines at a similar rate as the demand, prices will remain stable because home buyers will still need to compete for fewer listings.
For more information on the housing market, check out our Monthly Market Report.