What’s Happening in Kitsilano’s Real Estate Market?
The real estate market is slowing waking up from it’s annual holiday slumber, and with new mortgage changes now in place, so it will be interesting to see how things unfold. The new mortgage changes can decrease affordability for any Buyer who has at least 20% down, which would include any investors (second properties often require a higher down payment), detached house Buyers and most townhouse Buyers (as anything over $1-million requires at least 20% down). This means we could see a stall in the market as townhouse buyers will find it hard to jump into a detached house, and if townhouse buyers don’t move up, condo buyers can’t move up into townhouses, and so we won’t see as much inventory in any market. If the price of livable and affordable detached houses drop, then this chain of buying and selling can keep the market going for everyone looking for a new home.
One thing to note is that these new mortgage rules were instituted for Buyers with less than 20% down in the Fall of 2016, and it didn’t affect the market, though I admit that detached Buyers are working with higher debt loads, so the effect may be much different.
The market stats in this report are based on December’s data, which is a month that often skews the data. There are few new listings this month, and existing listings are removed from the market (often to be re-listed in the New Year). Many Buyers and Sellers focus on holiday activities so there are generally fewer sales compared to other months. By this time in the year, some Buyer fatigue may have set in, leading Buyers to take a few weeks off, though with the new mortgage rules coming into play, there may have been a run up in sales before the end of the year.
The condo, townhouse and detached house markets are all different market, so let’s quickly dive in to each one. Scroll down for graphs of the market stats.
Kitsilano Condo Market:
The Kitsilano condo market is the most active market right now, and there’s no wonder why – it’s the most affordable! The HPI Price for condos in Kitsilano was $633,500 with an average price per sqft of $967/sqft. These numbers have been steadily climbing for years, and with the new mortgage rules in place making it harder for Buyers to afford bigger properties, I don’t expect prices to go down anytime soon. Inventory is the lowest it’s been in years, though I expect it to increase over the next few months. The sales to active ratio for Kitsilano condos is 97% which is REALLY strong. If you have an investment property, or are looking to move up to a bigger property given the softer townhouse and house markets, now is a good time to think about selling your condo.
Kitsilano Townhouse Market:
The Kitsilano Townhouse market is not as busy as expected. The HPI price is $1,082,000 which has been very slowly growing, if not stabilizing for the last few months. The average price per sqft is $930/sqft. The total amount of inventory is down right now, and with the new mortgage rules making it a bit tougher for people to jump into a Kitsilano house, I don’t expect inventory to increase (though if townhouse owners are looking for a house, they can go to East Van and afford a lot more). The Sales to Active ratio is 17% which makes this a balanced market – good for Buyers and Sellers.
Kitsilano Detached House Market Update:
Houses in Kitsilano are showing an HPI Price of $2,449,000 which is down from 2017’s high in September of $2,665,000. Inventory is really low right now with 37 homes for sale, compared to 2017’s high of 69, though I do expect inventory to increase in the New Year. The sales to active ratio was 14% in December, which places Kitsilano Detached Houses firmly in balanced market territory – which is great for Buyers and Sellers.
Green = Detached Houses, Blue = Townhouses, Orange = Condos
I don’t expect inventory to increase significantly until mid-February or March. I do expect Buyers who have a pre-approval locked in under the old rules and rates to be eagerly looking. Having said that, interest rates are going up slightly, and we may see a bit of a “wait and see” attitude from some Buyers. If you haven’t spoken with a mortgage broker recently about your affordability, do so (we have some great people to suggest if needed – just contact me
)! In addition to the new mortgage rules, rates and rising slightly and you need to know what to expect, and if they’re anything you can do now to prepare to purchase a property. I can almost guarantee that you’ll be surprised in how accessible your next property can be.
Don’t hesitate to give me a call (778-387-7371) or email ([email protected]
) if you have any other questions on buying or selling in Kitsilano, or the market in general.