The nearly completed Rolston high-rise in Vancouver, June 26, 2013. Vancouver condo prices have dropped 7 to 8 per cent overall from a 2009 high.Jeff Vinnick/The Globe and Mail
Although Vancouver has a reputation as one of the most expensive cities in North America for housing, condo prices stayed flat or even dropped last year, according to recently released assessment numbers.
That follows several years of the same pattern, which means overall condo prices are now seven to eight per cent lower in inflation-adjusted dollars than they were at the recent peak of the condo market in 2009, says one analyst.
While that trend is not thrilling for pre-2009 buyers who had hoped to see big jumps in real-estate values, it's relatively good news for new buyers trying to get into the market, says Cameron Muir, chief economist for the B.C. Real Estate Association.
"I don't think there's much speculation now," he said. "It's back to a market that is based on the fundamentals of population growth and income growth."
Recently released figures from the B.C. Assessment Authority show that values of, for example, two-bedroom condos in Vancouver were down by almost $20,000 from the previous year in all parts of the city, whether it was on the west side (where a two-bedroom that was assessed at $599,000 in 2013 is now assessed at $571,000 for 2014), the east side ($383,000 now assessed at $364,000) or downtown.
Other parts of the region saw assessments for various types of condos drop by anywhere from a few hundred dollars to as much as $14,000.
One anomaly was Burnaby, where the assessment numbers showed a typical newer two-bedroom in north Burnaby up by $18,000 to $443,000 and a newer high-rise three-bedroom up by $40,000 to $477,000.
The overall trend in condo assessments, which are based on sale prices, is an important indicator for the real-estate market in a region where 95 per cent of all new housing is strata-owned condos or townhouses.
Analysts did note that the 2014 B.C. Assessment numbers looked at price changes between July of 2012 and July of 2013, which are a little deceptive.
Prices for all housing peaked in May of 2012 and then bottomed out in January, 2013, said Tsur Somerville, the director of the UBC Centre for Urban Economics and Real Estate.
"So you're seeing the mini-downturn we had" reflected in the assessment numbers released in January, he said.
But the assessment numbers don't account for the slight climb in real-estate prices in the second half of 2013.
In spite of the flat prices in condos, developers will not be slowing production, said Mr. Somerville and people in the industry.
"Builders don't need price increases. They need activity. They care about the volume of purchases," said Mr. Somerville.
Anne McMullin, who represents the province's biggest builders' group, said she doesn't expect any slowdown.
In fact, she said, there's likely going to be a slight increase in new projects, because people think the economy is going to improve slightly in the coming year.
That will, in turn, likely draw more people to the region.
"The last couple of years, there was a slight oversupply compared to population increase. We're expecting that to reverse," said Ms. McMullin, the executive director of the Urban Development Institute.
Frances Bula