The Vancouver real-estate market is set to be severely impacted by a ‘hora effect’ that will see a drop in sales as the winter months near.
In the first four months of the year, sales fell 15.7 per cent compared with the same period last year, according to data from real estate analytics firm Zillow.
In January, the company reported that sales in Vancouver’s main office tower fell 10.3 per cent, the third consecutive month of declines.
The impact will only intensify over the winter, as temperatures in Vancouver fall to -10C and snowfall levels in the region are expected to rise to record levels.
The decline in sales could also have an impact on the rental market, which is also struggling to hold on to rental housing.
The average rental income for a Vancouver apartment is $2,634, according the Vancouver Real Estate Board, and the average price of a home is $1.85 million.
The downturn in sales will affect the Vancouver rental market as well, as it will see an increase in listings.
The number of listings in the city is set at 1,500,000, up from the 1,000 to 1,600,000 mark in January, according Zillows data.
Meanwhile, in Victoria, the number of available listings is still less than 50,000.
In 2017, the vacancy rate in the Greater Victoria region was just 3.1 per cent and in 2016 it was just 2.5 per cent.
A large number of the homes in Victoria are occupied by families, while the average monthly rent in the area is $825.
As the snow and ice continue to fall, there is likely to be a reduction in demand for rental housing, as the rental sector is expected to be able to hold onto more of its properties, according Mark Zilch, CEO of Zillower.
“It’s really going to be impacted by the cold, and we’re likely to see a decline in demand,” Zilcher said.
“In fact, I’d say that’s probably the biggest concern, because if people are unable to live in their homes for a few weeks or a couple of months, then they’re likely going to have difficulty finding new ones.”
So we could see a slowdown in rental activity as a result of the winter and the freeze.
“Bureau of Statistics data from January 2018 shows the average rent in Vancouver is $905.
However, as snow and freezing temperatures begin to hit the region, it will become more difficult to find affordable housing.”
We’re looking at more people going out into the snow, and that will certainly have a greater impact on demand.””
It’s also going to impact on what people can do to stay warm and to stay out of the cold.”
We’re looking at more people going out into the snow, and that will certainly have a greater impact on demand.
“The ‘holo effect’ is a term used to describe when sales fall in the same month in a similar market as sales in the previous month.
For example, if the same market was experiencing a “hora” effect, sales would also fall in February, while sales would fall in March.
The effect is due to the weather, but it’s not a complete explanation of the sales drop.
According to Zillovs calculations, sales are down by 2.4 per cent in March compared with February.
Zillows research showed that in 2017, sales in January were down 5.6 per cent from February.
Sales in February were down 1.8 per cent on average.
The ‘loonie effect’While sales in 2017 are down 15.8 percent, sales were up 2.2 per cent during the first quarter of 2018.
However sales were down by 1.9 per cent over the same quarter last year.
The price of homes fell 1.3 percent in the first half of 2018 compared with last year and the median price of properties in Vancouver dropped by 6.4 percent in 2018.
Zilch said the drop in the market was “very surprising”, as it was expected to lead to an increase, albeit not as large as the drop seen in the January-February period.”
As we look at what’s going on in the housing market, I’m concerned about the ‘lucky break’ in that we’re seeing a really strong recovery in that period, and I think it’s important that we continue to see the housing supply increase,” he said.
However Zilich said he believed the market would bounce back, given the recovery in the number and quality of rental housing available.”
I don’t see any reason to worry about the loonie falling further,” he added.”
If you look at the housing markets around the world, we’ve had this huge housing bubble that was oversupplied and then we’ve seen a massive recovery in those housing markets, with a lot of people moving into rental