Vancouver Housing Market Outlook 2023
What Homeowners and Real Estate Developers Need to Know
If you are a homeowner or real estate developer in Vancouver, it's important to stay informed about the housing market outlook. In this synopsis of the CMHC Housing Market Outlook for 2023, we provide you with the latest information on the state of the Vancouver rental housing market, and what you can expect in the coming year.
Despite the current correction, residential real estate prices remain on a long-term growth path. While home prices are expected to bottom out in 2023, the price level will remain elevated. Home prices peaked in the spring of 2022, with single-detached prices rising by 50% at their highest point in 2022 and finishing 2023 up 30% when compared to base-year 2019.
Meanwhile, apartment prices had risen by 27% at their highest point in 2022 and will finish 2023 up 15% compared with pre-pandemic levels. Although there will be some homeowners who must sell due to a change in life circumstances, patient sellers will wait for prices to resume growth before listing.
Housing demand in Vancouver is expected to continue to increase. Buyers with smaller budgets will place highest demand on the apartment/condo market. As the volume of smaller deals increase, it will pull the average purchase price downward in 2023. If interest rates lower, it make stoke the single-detached markets and thereby raising the average purchase price.
Housing starts are predicted to fall in 2023, which will lead to lower availability of housing in the long run. Going beyond 2023, growth in the customer base as well as stabilization in costs are expected. This will reduce some uncertainty in the market, encouraging the launch of new projects. Real estate developers need to be aware of these trends and plan accordingly.
Lastly, rental units remain in short supply despite greater population growth. Even though Vancouver's purpose-built rental market is on track to deliver a record number of new units, the scale falls well below population growth. Vancouver net population growth exceeded 80,000 people in 2022, compared with just 4,000 units of net purpose-built rental creation. Average 2-bedroom rents are set to increase significantly over the forecast horizon. This is a trend that is expected to continue for the foreseeable future.
The secondary market is expected to pick up a lot of the rental market slack. The secondary market is made up of condo owners renting their units. However, even this will not keep pace with demand. Rents will continue to rise and vacancy will continue at historically low levels.
As the Vancouver housing market outlook continues to evolve, it's important for homeowners and real estate developers to stay informed and adapt their strategies accordingly. Keeping an eye on the latest trends and forecasts can help you make informed decisions about buying, selling, or developing rental properties in Vancouver.
Click to review the full CMHC Housing Market Outlook.