Condo prices are surging in Greater Vancouver while the market for detached properties has bounced back less than a year after a tax on foreign buyers cooled off sales.
The benchmark price, which is the industry's representation of typical homes sold, reached a record $600,700 for condos in the region last month, up 17.6 per cent from June, 2016, according to the Real Estate Board of Greater Vancouver.
The townhouse market is also rallying, with the benchmark price climbing 10.7 per cent over the past year to touch a high of $745,700 in June.
By contrast, the region's benchmark price for detached properties rose 1.4 per cent over the past year to hit a record $1,587,900 in June. That edged out the previous high of $1,578,300 in July, 2016.
While the Barenaked Ladies sang about buying a "nice chesterfield or an ottoman" if they had $1-million, the benchmark price in Greater Vancouver for all housing types set a high last month of $998,700 – leaving little cash for new furniture if you were to purchase a home and be mortgage-free. That price is up 1.8 per cent from May and a 7.9-per-cent gain from June, 2016.
"Two distinct markets have emerged this summer. The detached home market has seen demand ease back to more typical levels while competition for condominiums is creating multiple-offer scenarios and putting upward pressure on prices for that property type," Greater Vancouver board president Jill Oudil said in a statement Wednesday.
After brisk sales early last year, the number of existing properties changing hands began falling in April, 2016, and continued sliding for several months after the B.C. government imposed a 15-per-cent tax on foreign buyers in the Vancouver region in August.
The sales slowdown for detached houses, condos and townhouses has continued, with 3,893 properties changing hands last month, down 11.5 per cent from a year earlier. Still, June's total sales volume rang in 14.5 per cent higher than the 10-year average for that month.
The board prefers to look at benchmark prices instead of average prices, which are skewed upward whenever there is a flurry of high-end sales. The average price for condos sold last month was $656,447, down slightly from the record $656,919 in May but up 15.8 per cent from a year earlier.
The regional price for detached houses averaged $1.71-million in June, down 6.4 per cent from the record $1.83-million in May and a 3.1-per-cent decline over the year.
Figures have not been released yet for June's average price within the City of Vancouver for detached houses. But in May, the price for detached properties sold within Vancouver's city limits averaged $2.76-million, up 1.3 per cent from May, 2016, according to Multiple Listing Service data.
Vancouver remains by far Canada's most expensive housing market. The City of Toronto saw the price for detached houses average $1.5-million in May, down 4.7 per cent from April but up 16.6 per cent from May, 2016. The Ontario government implemented a 15-per-cent tax effective April 21 on foreign home buyers in the Greater Golden Horseshoe region, a sprawling land base that surrounds the Greater Toronto Area.
In the B.C. Fraser Valley Real Estate Board's territory, total sales dropped 10.2 per cent over the past year to 2,571 transactions in June. The price for various properties sold in June averaged $751,584, or a 5.6-per-cent rise from the same month in 2016.
The price for detached houses averaged $1.02-million last month, up 7.4 per cent from a year earlier, according to the Fraser Valley board, whose area includes suburbs such as Surrey and Langley. The benchmark price for detached houses rose 2.1 per cent to $934,600 in June compared with May, and is up 8.5 per cent since June, 2016.
Robert Hogue, senior economist at Royal Bank of Canada, said B.C.'s real estate market has recovered faster than expected. "We still expect poor affordability and rising interest rates to weigh on the market in 2018, keeping resales on a downward track and containing the pace of price increases to low single-digits," he said in a research note.