Even by the city’s lofty standards, price surges in the red-hot Vancouver real estate market have crossed into jaw-dropping territory.
The median price for single-family detached homes sold on Vancouver’s coveted west side reached $2.91-million last month. That’s up 15.9 per cent over the past year and represents a 42-per-cent jump from October, 2013.
And on the city’s east side, October’s median price of $1.29-million is 29.4-per-cent higher than a year earlier and up 47.7 per cent over the past two years.
Greater Vancouver is witnessing a booming housing market, especially within the city of Vancouver. For prospective buyers watching in frustration, it is the perfect storm of high housing demand and limited supply. The region is already boxed in by the ocean, mountains and protected areas collectively known as the agricultural land reserve.
“When my clients go to open houses, they see a lot of people who end up bidding,” said Ken Wong, an agent with Royal Pacific Realty Group. “Bidding wars are common. There just isn’t enough housing product out there.”
Prices for detached houses in Greater Vancouver hit a record-high average of $1.58-million in October, up 26.7 per cent from the same month last year and smashing the previous high of $1.47-million set in August. Prices for detached properties within the city of Vancouver averaged $2.2-million in September, but the Real Estate Board of Greater Vancouver hasn’t disclosed last month’s average for the city proper.
An increase in buyers from China keen on high-end properties in parts of Vancouver’s west side, low interest rates and a buoyant economy have garnered the most attention as key factors behind soaring residential prices. British Columbia, which saw workers flock to Alberta before oil prices plunged, has again become a magnet for people moving from other provinces.
But the scarcity of land able to be developed in the Vancouver area gets much less publicity, said Jason Turcotte, vice-president of development at Cressey Development Group. “There isn’t a lot of land for building,” he said.
To put the rapid gains in perspective, the two-year price appreciation of $861,000 on the city’s west side works out to hikes averaging $35,875 a month.
The housing market has sparked heated debate about how much of a role buyers from China have played in driving up prices, especially in Vancouver.
Canada Mortgage and Housing Corp. dismisses the notion of a housing bubble, estimating that “foreign investors” account for 4 per cent of Greater Vancouver’s sales of detached houses, townhouses and condos. There are vastly differing views, however, on the sensitive topic of overseas money.
A pattern has formed that indicates an influx of buyers from China into three high-end neighbourhoods on Vancouver’s west side, according to researcher Andrew Yan, who studied 172 sales of detached houses over a six-month period that began last summer. But what some depict as a trend, others see as a drop in the bucket of total sales.
It is a seller’s market. There were 3,646 detached houses, townhouses and condos that changed hands last month in Greater Vancouver, up 36.2 per cent from the 10-year average. Total listings for the range of existing housing types fell 30 per cent from October, 2014.
Fresh data on detached houses show record-high prices in a wide range of areas in the Vancouver region. Prices for townhouses and condos have picked up over the past year, with many suburban markets finally recovering to levels before the 2008-09 recession.
Still, the price gap between detached properties and condos is now wider than ever at $1.09-million. October condo prices averaged $494,689 in Greater Vancouver.
Greater Vancouver’s benchmark Home Price Index (HPI) also set a new high last month at almost $1.2-million for detached houses sold on the Multiple Listing Service, or a gain of 20.1 per cent from October, 2014. The HPI is a representation of the typical house in an area, providing a better barometer than average prices, according to real estate officials.
The HPI for single-family homes in 11 major Canadian markets reached $585,500 in September, up 8 per cent from the same month in 2014. The Canadian Real Estate Association focuses on the HPI, arguing that averages skew the picture because the most expensive properties are included.
Vancouver has Canada’s highest housing prices, followed by Toronto. On Thursday, the Toronto Real Estate Board is slated to release its October statistics. In September, prices for detached houses sold in the city averaged $1.05-million, up 10.7 per cent over the past year and 23.1 per cent from the same month in 2013.