Vancouver’s detached home prices at record high as demand soars

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The average price of single-family detached homes in Greater Vancouver jumped 20 per cent to a record high last month amid robust demand for all housing types.

The region, which includes suburbs such as Burnaby and Richmond, saw the price for detached houses average $1,442,296 last month, up from $1,200,539 in June, 2014, the Real Estate Board of Greater Vancouver said Friday.

"Demand in our detached home market continues to drive activity," board president Darcy McLeod said in a statement. "There were more detached home sales in the region last month than we've seen during the month of June in more than 10 years."

Sales of detached homes climbed 31.3 per cent year-over-year to 1,920 last month. Greater Vancouver's benchmark Home Price Index (HPI) rose 14.8 per cent to $1,123,900 for detached properties.

The benchmark HPI is a representation of the typical house in an area, providing a better barometer of real estate trends than average prices, which skew the picture because the most expensive properties are included, according to housing industry officials.

Real estate officials have been touting Metro Vancouver, which includes Greater Vancouver and less-expensive suburbs such as Surrey and Langley in the Fraser Valley Real Estate Board, as a broader area for prospective home buyers to consider.

Greater Vancouver's condo sales increased 35.6 per cent to 1,774 last month while townhouse sales improved 7.1 per cent to 681. June's total sales of 4,375 of all types of properties set a record for that month. Those sales were 29.1 per cent higher than the 10-year sales average for June.

In May, the price for detached houses within the city of Vancouver averaged $2.23-million. The board didn't provide June's average detached price for Vancouver proper, but released data on the city's west and east side.

The median price on Vancouver's west side for detached properties hit a record $2,967,500 last month while the median price of $1,238,048 on the east side also set a new high.

Demand for detached homes has been coming from new arrivals, especially internationally, observers say.

David Mulroney, Canada's ambassador to China between 2009 and 2012, cautioned recently that there is a lack of reliable data on the origins of the home buyers. But he sees pent-up demand in China for properties in Vancouver and Toronto. Some foreign jurisdictions "have imposed or are exploring taxes on non-resident owners," Mr. Mulroney writes in his new book Middle Power, Middle Kingdom.

Last month, B.C. Premier Christy Clark dismissed a proposal by Vancouver Mayor Gregor Robertson, who called for the province to introduce a speculation tax on people who flip houses. She also rejected his suggestion to selectively raise B.C.'s property transfer tax to target highend transactions or a luxury tax.

Mr. McLeod said there are an array of conditions that have created a seller's market. "It would be easy to point to one factor that's causing this cycle, but the truth is that it's a number of different factors," he said. "Conditions today are being driven by low interest rates, a declining supply of detached homes, a growing population, a provincial economy that's outperforming the rest of Canada, pent-up demand from previous years and, perhaps most importantly, the fact that we live in a highly desirable region."