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Greater Vancouver and Fraser Valley home buyers have pushed up prices for single-family detached houses to record highs.
The benchmark home price index hit $984,300 last month for detached properties sold in Greater Vancouver, up 6.6 per cent from August, 2013. In the Fraser Valley, which includes the sprawling and and less-expensive Vancouver suburb of Surrey, the detached price index climbed 3.4 per cent to $569,800 over the past year.
The record-high prices for detached houses will prompt more consumers, especially first-time home buyers, to shop for townhouses and condos, said Shaadi Faris, vice-president at Vancouver-based Intergulf Development Group.
Some baby boomers are selling their large detached homes and moving into condos while helping their children with down payments, fuelling the rally in housing prices in Greater Vancouver, Mr. Faris said in an interview Wednesday. "Locals have built up equity and are downsizing," he said.
A variety of factors have led to property prices reaching new highs, including low interest rates, a stable economy and an influx of residents from other provinces and countries, real estate experts say.
Intergulf has been getting interest on its various projects primarily from prospective buyers who will live in their units. While there are many inquiries from long-time Vancouverites and people with recent ties to China, there are a small number of outright foreign investors, Mr. Faris added.
Intergulf began construction in early 2014 on its Empire at QE Park condo and townhouse project near Queen Elizabeth Park on Vancouver's west side.
The index price for existing detached homes on Vancouver's west side rose 9.7 per cent over the past year to $2,282,400, while increasing 10.3 per cent to $936,500 on the east side.
By contrast, the index price for condos on the west side reached $495,900 in August, up 5.7 per cent from the same month last year. Condo prices on the east side posted a 3.1-per-cent increase year-over-year to $313,400.
The Real Estate Board of Greater Vancouver said the region's housing sales rose to 2,771 in August, up 10.2 per cent from a year earlier and 4.3 per cent higher than the 10-year average for the month.
"Activity this summer has been strong but not unusual for our region," Greater Vancouver board president Ray Harris said in a statement.
In the Fraser Valley, townhouse prices nudged up 0.1 per cent to $298,500 over the past year, but condo prices fell 3.5 per cent to $196,700.
Fraser Valley board president Ray Werger said many first-time buyers in the suburbs are able to afford townhouses or smaller detached homes, including new developments in Cloverdale and Langley.