METRO VANCOUVER (NEWS 1130) – Metro Vancouver’s real estate market may be down from its stratospheric highs from a year or so ago, but one segment is still skyrocketing. Unfortunately for first time buyers, it’s the one most people see as entry-level.
Condominium prices have jumped up as much as 25 per cent in some areas compared to the third quarter a year ago.
“The numbers essentially show a tale of two markets,” says Adil Dinani with Royal LePage, which released its latest House Price Survey this morning.
“One is a very robust, active condo market which is seeing double-digit increases year-over-year, whereas if you look at the single-family market — detached homes and bungalows — they have been relatively flat over the same period,” he tells NEWS 1130.
“I think the condos have been attractive because, relatively speaking, they are the last touchpoint of affordability in Greater Vancouver. Prior to this last 12-month period, houses were almost in runaway mode in terms of price appreciation.”
That said, the median price of a condominium across the region hit $622,392 in the third quarter of this year.
The biggest increases over last year were in North Vancouver (25.2% to $614,173), Burnaby (24.6% to $561,558), and Coquitlam (23.8% to $471,749).
Royal LePage’s price index suggests affordability constraints are driving many prospective buyers into the condominium market, putting a “severe strain” on inventory levels and intensifying competition.
“New mortgage regulations, which were introduced in October of last year, only compounded this trend, limiting consumers’ purchasing power and pushing many down into the entry-level segment of the market,” states the report.
“As prices continue to rise, and the affordability that remains within the marketplace deteriorates, prospective homeowners previously on the sidelines are returning to the market in fear of being permanently priced out.”
But Dinani sees a silver lining.
“What’s interesting — the narrative that is playing itself out — is that if you currently own a condo, you’ve seen this tremendous jump in prices over the last 12 months, whereas if you are looking to move up in the market, that detached market has been flat. The gap to move up and graduate to the next level is actually shrinking,” he explains.
Royal LePage says the median price of a bungalow in Greater Vancouver appreciated by 3.5 per cent year-over-year to $1,422,458, while the median price of a standard two-storey home fell, dropping 1.1 per cent to $1,532,849 over the same period.
Click here for a city-by-city breakdown of housing types and prices.
“What I see playing out is similar conditions persisting in the condo market,” says Dinani.
“I see the single family market in this ‘normalized’ environment at least for the balance of the year and in some price categories, we are actually moving toward a buyers’ market territory for single family homes. Will we see buyers take their homes off the market if they’re not selling or will we see a proactive approach where they reduce prices to get that interest and attraction?”
Dinani calls it a relief for anyone looking to buy a detached home.
“About 18 months ago it was really hard to enter that segment. Now there’s some time to make a decision, there’s room for negotiations and we are almost entering a normal market. For people looking to buy a house, it’s a window — especially if you already own a townhouse or condo. It’s a celebrated opportunity, almost, for those folks looking to move up in the market.”