Housing prices in Vancouver's suburbs are soaring as sales volume hits record highs during the real estate boom.
The benchmark price for single-family detached houses sold last month in Tsawwassen, B.C., reached a record $1.17-million, up 41 per cent since April, 2015. Other suburbs that saw prices leap to new highs in the Real Estate Board of Greater Vancouver's territory include Richmond, Ladner, Port Coquitlam, Coquitlam, New Westminster, Port Moody and Burnaby.
Those suburbs enjoyed percentage gains in prices that were higher than on Vancouver's west side and east side, which have traditionally led the housing rally.
In Greater Vancouver as a whole, the benchmark price for detached houses surpassed $1.4-million last month to set a record, up 30.1 per cent from a year earlier. The benchmark price is a representation of the typical house in an area, providing a better barometer of real estate trends than average resale prices, according to the board.
The benchmark price for detached properties sold last month was $3.2-million on Vancouver's west side and $1.35-million on the east side, both up more than 28 per cent.
Sales volume set a record for the third consecutive month in Greater Vancouver. There were 4,781 transactions last month, up 14.4 per cent from April, 2015, and 41.7 per cent higher than the sales average for that month.
In the Fraser Valley Real Estate Board's territory, east of Vancouver, the benchmark price for detached houses was $776,500 last month, up 30.4 per cent from a year earlier. The number of transactions set a record for the fourth consecutive month in the Fraser Valley.
In both Greater Vancouver and the Fraser Valley, March sales set all-time records for any month of the year. April tends to be slower than March for attracting buyers.
Fraser Valley board president Charles Wiebe said the robust B.C. economy, low interest rates, strong demand and limited housing supply are contributing to the region's housing boom.
But Josh Gordon, an assistant professor at Simon Fraser University's School of Public Policy, argues that foreign demand is the main driver of the residential housing bonanza, especially an influx of buyers from China.
While the Vancouver region is bounded by the ocean, mountains and the Canada-U.S. border, Prof. Gordon estimates that geographic constraints account for less than 30 per cent of the price surge in recent years. And he said the economy and low mortgage rates have little to do with the frenzy of real estate activity.
"This continuous flow of money from abroad, combined with inaction and disinterest on the part of Canadian governments, has created expectations of continuously rising prices," he wrote in a new study, warning about a housing affordability crisis.
"The provincial government in particular has become hooked on the tax revenues and short-term economic growth that the housing bubble has generated."
The seller's market includes condos, which have jumped 20.6 per cent over the past year to $475,000 for the benchmark price in Greater Vancouver – relatively affordable for the region.
"But beware: Most of these condos will not be family friendly, so they only offer a short-term option for many," Prof. Gordon said.