Photo: James Bombales
Problematic conditions remain a key concern in Metro Vancouver’s housing market.
As of the end of September 2017, the hot market continued to experience significant imbalances, with strong evidence of overvaluation and overheating, according to the Canada Mortgage and Housing Corporation’s (CMHC) Housing Market Assessment, published today.
In addition, the region is sustaining its “two-speed” housing market. CMHC uses this term describe a market diverging, with demand for attached homes and condos significantly outpacing demand for detached homes.
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“We have moderate evidence of overheating and price growth acceleration due to the two-speed housing market that has now developed in Vancouver,” Eric Bond, CMHC principal market analysis for Vancouver, tells BuzzBuzzNews.
Inventories for both new and resale multi-family units are at or near all-time lows, as buyers try to find affordable housing in the region, says CMHC.
According to Bond, many buyers are opting for homes in outlying areas of the region, which in turn is causing pronounced price growth in those areas.
“In the Fraser Valley real estate board for example, for condominiums that previously might not have been as desirable, now we are seeing interest from buyers in those units due to their relative affordability and the context of the region,” says Bond.
Although approximately 40,000 units are currently under construction in Vancouver, the CMHC’s assessment shows weak evidence of overbuilding in the region.
With Metro Vancouver’s vacancy rate at 0.9 per cent last year, new inventory is needed to meet demand and provide relief in the rental market, says Bond.
Going forward, CMHC predicts that Metro Vancouver’s two-speed housing market will continue into 2019 due to disparities in affordability between condos, attached units and single-detached homes.