To get an idea of what $1-million in real estate looks like, take a 40-minute bus ride east of downtown Vancouver to the suburb of Burnaby.
On Union Street, a modest bungalow built in 1949 with a 1,114-square-foot main floor sold last summer for $1,055,000.
Welcome to the Vancouver region, where million-dollar properties are far from dream homes. Benchmark prices for single-family detached houses in Greater Vancouver, including bedroom communities such as Burnaby and Richmond, exceeded $1-million last month for the first time.
The Real Estate Board of Greater Vancouver reported Monday that its home price index (HPI) reached a record-high $1,002,200 last month for detached houses, up 8.1 per cent from December, 2013. The board uses the benchmark HPI, which strips out the most expensive homes sold on the Multiple Listing Service, because it believes the index provides a better barometer of trends than average prices.
Lot values alone approach $1-million in many parts of Vancouver's east side and in Burnaby. An aging house that hasn't been renovated, such as those built in the 1940s or older, often carries a market value of less than $60,000 for the building itself. Lot values on Vancouver's west side typically start at $1.4-million, with developers eyeing such properties because they seek to knock down an older house and build a new one that's bigger.
In Burnaby, many lots tend to be much larger than those in the City of Vancouver. For those wanting to be within a 20-minute bus ride of downtown Vancouver, there are homes in the million-dollar range on the city's east side. On Gladstone Street on Vancouver's east side, a renovated bungalow (originally built in 1963) sold for $1,045,000 last spring, although the lot is half the size of the Union Street land in Burnaby.
There are now five jurisdictions in the region where the median price for detached houses has jumped beyond $1-million: Vancouver, West Vancouver, North Vancouver, Richmond and, most recently, Burnaby.
Including the priciest homes sold, the average price for detached properties in Greater Vancouver hit $1,344,334 last month, just shy of the record monthly average set last February.
Real estate board president Ray Harris said single-family detached properties are highly coveted, as evidenced by sharp price gains. The Vancouver east side's detached HPI last month was $970,500, up 11.9 per cent from December, 2013, while the west side's detached HPI was $2,325,200, up 10.6 per cent.
"More people who can't afford a detached home will be going to townhouses and condos," Mr. Harris said. Greater Vancouver townhouse prices have advanced 4.5 per cent to $476,800 over the past year while condo prices have climbed 3.5 per cent to $380,700. The overall HPI for detached homes, townhouses and condos rose 5.8 per cent to $638,500. Sales volume for the three housing categories totalled 33,116 in 2014, up 16.1 per cent from 2013.
As any prospective home buyer knows, finding a million-dollar bargain has become increasingly difficult. There has been a cheeky website since 2010, crackshackormansion.com, that challenges viewers to guess whether the photographs shown depict homes listed in Vancouver or run-down houses elsewhere that were allegedly used by drug dealers.
To find more affordable properties, a trip farther afield is required. In the Fraser Valley, which includes the sprawling and less expensive Vancouver suburb of Surrey, December's HPI for condos was $191,100, down 0.8 per cent year over year. Benchmark prices for Fraser Valley detached houses increased last month to $573,100, up 4.3 per cent from December, 2013.
Ray Werger, president of the Fraser Valley Real Estate Board, said some pockets in the region are experiencing a shortage of lower-priced detached homes.
While the average detached price last month reached $452,686 in Abbotsford, it hit $1,122,915 in the White Rock/South Surrey area.