Greater Vancouver condo prices continued to surge in the second quarter of 2017, while detached prices slowly began to stabilize from record gains seen last year.
Last quarter, the aggregate price of a home in Greater Vancouver increased 2.6 per cent year-over-year to $1,181,309, a noticeable decline from double-digit increases seen in the red-hot region last year, according to Royal LePage’s House Price Survey released today.
“Being on the frontline, I can say that the condo market is still in overdrive and it’s really just the detached market that’s starting to level out a bit,” Adil Dinani, a realtor with Royal LePage, tells BuzzBuzzNews.
The real estate company releases the survey on a quarterly basis, tracking pricing data for two-storey homes, bungalows and condominiums in the nation’s largest real estate markets.
According to Royal LePage, since Q1-2017 overall home sales and prices are up in Greater Vancouver and prices are anticipated to rise across BC’s Lower Mainland during the rest of 2017.
This jump in prices is coming after the region experienced a significant correction that began in August 2016, when the BC government implemented a 15 per cent foreign buyer tax in an effort to cool the market.
Buyers who remained on the sidelines following the introduction of the tax are now returning to the market, driving fierce demand for the region’s more affordable property type, condos.
“The market is back to facing a supply and demand gap, with buyers returning while inventory has tapered off, as sellers hold onto their properties until they’ve found an adequate alternative,” says Randy Ryalls, General Manager of Royal LePage Sterling Realty, in a press release.
“In the end, Greater Vancouver is still very much a seller’s market, led by the significant demand within the condominium segment, which is historically unusual given that the property type tends to trail detached dwellings,” he adds.
Seeing double-digit growth compared to Q2-2016, the median price of a condo in Greater Vancouver soared 12.4 percent to $578,213 in Q2-2017. This was the largest year-over-year price gain out of all property types in the region.
During the same period, two-storey homes saw a 0.5 per cent drop in average price to $1,480,706, compared to 2016’s fourth quarter.
Last quarter, the City of Langley saw the highest year-over-year aggregate price gain in the region with a 12.3 per cent increase to $791,721. Meanwhile the previous leader in Q1 2017, Richmond, saw a moderate 2.5 per cent uptick to $1,057,629 compared to a year ago.
For many homebuyers, homes in the City of Vancouver are out of their price ranges, spurring them to search for affordable options in neighbouring suburbs.
“I think naturally due to affordability people are migrating east. And they don’t want to compromise on quality of life, schools, lifestyle and I think Langley offers a lot of that,” says LePage’s Dinani.
By the end of the year, Royal LePage anticipates Greater Vancouver will see a slight year-over-year price gain of 0.5 per cent to $1,208,780 compared to 2016’s fourth quarter aggregate price of $1,202,766.
However, on Wednesday the Bank of Canada increased its key interest rate, which influences mortgage rates, by 25 basis points to 0.75 per cent. With higher interest rates for mortgages, the region’s housing market could be noticeably impacted.
“We’ll have to see if this is the first of more interest rate hikes, if it is we’ll probably see a levelling in both segments of the market. Condos, townhouses, the attached and detached segment,” says Dinani.