Greater Vancouver home prices see double-digit increase
May 11, 2018
Critically low inventory levels and growing demand continued to fuel home price appreciation across Greater Vancouver in the first three months of 2018, according to the recent Royal LePage House Price Survey.
Greater Vancouver’s strong economy continued to entice purchasers from across Canada. Meanwhile, unintended side effects of the new mortgage regulations (the “stress test”) pushed many into the entry-level segment of the market due to weakened purchasing power, causing condominium prices in particular to soar. As a result, the aggregate home price in Greater Vancouver experienced double-digit growth, rising 10.3 per cent year-over-year to $1.28 million.
Median prices of homes in Vancouver
The median price of a condominium surged by 19.8 per cent year-over-year to $668,342, and the median price of a bungalow grew 6.2 per cent to $1.4 million. Two-storey home prices rose 9.6 per cent year-over-year to $1.6 million.
Low supply levels
“Greater Vancouver’s real estate market continues to be defined by low supply levels,” says Randy Ryalls, general manager, Royal LePage Sterling Realty. “The only way that we can create a healthy and sustainable market is by increasing the amount of available inventory. We would need roughly 5,000 more homes on the market today to ensure steady, sustainable price growth.”
Weakened purchasing power
Due to their weakened purchasing power, many purchasers are being pushed into the entry-level segment of the market. Others who were able to secure pre-approved mortgages prior to the new regulations pursued property in an effort to avoid being subjected to the stress test. Together, this causes pricing and competition to intensify while straining inventory levels.
Solution?
“Instead of curbing demand, we should be embracing it,” says Ryalls. “Finding creative solutions to combat supply shortages, like addressing bottlenecks in the supply of new homes, could put an end to unsustainable price growth and allow us to celebrate demand for what it really is: a key driver of our economic prosperity.”
First quarter fast facts:
- The city of Vancouver saw strong price appreciation, rising 10.1 per cent year-over-year to $1.48 million.
- Appreciation has remained relatively flat in West Vancouver, Canada’s most expensive market. Condominiums, though, rose by a healthy 4.9 per cent year-over-year to $1.1 million.
- In North Vancouver, purchasers flocked to the condominium market due to its relative affordability and proximity to downtown. While the region’s aggregate home price saw strong, single-digit growth, rising 8.0 per cent year-over-year to $1.47 million, its condominium market posted one of the largest annual gains of any property type tracked in the nation, surging 28.4 per cent year-over-year to $705,259.
- Home prices in Richmond witnessed strong, single-digit growth, rising 8.0 per cent to $1.13 million compared to last year. Many purchasers looked for condominiums in the area due to their relative affordability, causing its median price to soar 22.8 per cent year over year to $564,701.
- Demand remained strong in Burnaby and Coquitlam, with both regions’ aggregate home price witnessing double-digit growth, rising 11.7 per cent and 15.3 per cent year-over-year to $1.13 million and $1.08 million, respectively.
- In search of relative affordability, prospective homeowners continued to flock to Surrey, which saw its aggregate home price rise by 16.3 per cent year-over-year to $879,848. This was led by the condominium segment, which rose by a nation-leading 29.8 per cent.
- Langley witnessed the largest year-over-year aggregate home price increase of any region studied in Greater Vancouver, soaring 18.5 per cent year-over-year to $933,725. Many millennials have found their first home here.
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