Single-family detached houses are becoming an ever-shrinking portion of the total housing stock in the Vancouver region, adding to pricing pressures in an already hot market.
The share of detached houses as a percentage of all residential properties in the region has tumbled from 65 per cent in 2000 to 54 per cent last year, Central 1 Credit Union senior economist Bryan Yu said Tuesday.
"The detached share of the stock will continue to decline with new product geared to condos, and low-density areas parcelled and rezoned to facilitate higher-density housing, making the standard detached home more of a luxury product," Mr. Yu wrote in his report.
Within Burnaby, Richmond and Vancouver, the portion of detached houses out of total properties in those cities has fallen into the range of 40 per cent to 50 per cent, he said, citing Landcor Data Corp. statistics.
For the region as a whole, "a conservative estimate is for the detached share to decline to about 40 per cent over the next 25 years," Mr. Yu said, referring to the broader territory roughly defined as Metro Vancouver.
Detached houses now account for only 20 per cent of housing starts in the Vancouver area, fuelling upward pressure on prices amid robust demand. The price for existing detached houses sold in the city of Vancouver averaged $2.2-million in September and averaged $1.58-million in October within the boundaries of the Real Estate Board of Greater Vancouver.
In Metro Vancouver, the median detached price is forecast to surpass $1-million in 2017, according to Central 1 Credit Union's analysis. The average price in Metro Vancouver for new and existing detached houses sold last year reached $1.1-million.
Canada Mortgage and Housing Corp. warns that regional housing markets in Toronto, Saskatoon, Regina and Winnipeg are at a high risk of faltering due to "strong evidence of problematic conditions," notably economic and population growth not seen as sufficient to support the pace of price increases.
CMHC concludes that the Vancouver region shows "moderate" signs of being overvalued, but there is "weak evidence of problematic conditions."
Dan Scarrow, vice-president of corporate strategy at Macdonald Realty Ltd., estimates that 16 per cent of his firm's 1,500 sales of detached houses, condos and townhouses within the city of Vancouver last year went to buyers from China.
CMHC and the B.C. Real Estate Association estimate that "foreign investors" accounted for 4 per cent of last year's sales of all residential housing types in Greater Vancouver. CMHC and the association point to a seller's market for resale properties as demand grows and listings fall for detached houses, townhouses and condos.
On Tuesday, the association issued a revised 2015 forecast, saying there will be 61,500 total sales this year of all housing types covered by real-estate boards for Greater Vancouver and the Fraser Valley, up 26.3 per cent from last year.
The Real Estate Board of Greater Vancouver's territory covers a large portion of Metro Vancouver, including Burnaby, Richmond and New Westminster. But Metro Vancouver is a broader political entity that has 23 members, including other suburbs, such as Surrey, White Rock and Langley – whose sales fall under the Fraser Valley Real Estate Board.
A measurement closely watched by the housing industry, known as the sales-to-active-listings ratio, reached 38.1 per cent in Greater Vancouver last month. B.C. real-estate agents consider it a balanced market when the ratio ranges from 15 to 20 per cent. It is deemed a buyer's market below 15 per cent and a seller's market above 20 per cent in the Vancouver region. There were a total of 9,569 active listings in Greater Vancouver last month, down 30 per cent from a year earlier.