For Mark Farrow, Vancouver's booming real estate market has been his ticket to semi-retirement.
He bought a modest home in the trendy Kitsilano neighbourhood on the city's west side for $279,000 in 1983. Last month, Mr. Farrow decided to cash in, agreeing to sell the property for $1,875,000. "If you look at pictures, you will see the house doesn't have character. I've fixed it up, but there are no granite countertops or fancy kitchen," he said in an interview Tuesday.
Mr. Farrow, 57, and his family have been among the winners in Vancouver's red-hot real estate sector, where homes are being snapped up at record prices as sales volume surges amid a decline in total listings.
Agents in the country's most expensive housing market say bidding wars have returned and weekend open houses are experiencing a jump in traffic.
"We're seeing multiple offers for detached properties. It's a seller's market," said Ray Harris, president of the Real Estate Board of Greater Vancouver.
Average prices climbed to a new high of $1,397,305 last month for detached houses in Greater Vancouver, including suburbs such as Burnaby and Richmond.
Greater Vancouver's home price index (HPI) rose 6.4 per cent to a record $649,700 last month for detached homes, condos and townhouses. For detached homes, the region's benchmark HPI reached a new high of $1,026,300, up 9.7 per cent from a year earlier.
The 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.
Even using the HPI as a measure, prices are lofty, reaching $2,403,900 for detached homes on Vancouver's west side. That's up 12 per cent over the past year, 40.8 per cent over five years or 146.1 per cent over a decade.
There were 3,061 sales last month of existing properties on the Multiple Listing Service, up 21 per cent from February, 2014, and 20.2 per cent higher than the 10-year average for February.
Total listings fell 11.3 per cent year over year. The result has been a sales-to-active-listings ratio of 25.7 per cent – the highest since March, 2011. New listings increased last month, but fell short of offsetting brisk demand.
B.C. real estate agents consider it a balanced market when the sales-to-active-listings ratio ranges from roughly 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 is robust demand as people migrate from other provinces and internationally from countries such as China.
In Vancouver, Mr. Farrow and his spouse Elizabeth are preparing to move to Salt Spring Island, where they will have 20 acres to enjoy after settling into their newly built house this spring. They acquired the Salt Spring Island lot for $198,000 in 1995, and have spent roughly $800,000 on constructing a new home.
They plan to help buy a home in suburban Vancouver for their two grown sons, now aged 30 and 22. The two men have been living with their parents, given the high cost of housing.
Mr. Farrow, who has worked for 37 years in the boiler heating business, is pleased to have found an attractive offer for the two-storey Kitsilano property – nearly seven times the purchase price in 1983. "It seemed like a lot of money for a house back then," he said, adding that it took 22 years to pay off the mortgage.
Real estate agents say bidding wars are focused on detached homes. In many instances, detached properties are being sold primarily for their land value, with developers eyeing prospects for building larger homes on a site.
In the Fraser Valley, which includes the sprawling and less expensive Vancouver suburb of Surrey, housing sales swelled 21.3 per cent. The HPI for detached homes in the Fraser Valley climbed last month to $581,400, up 4.2 per cent from February, 2014.