Greater Vancouver condo prices surge, but sales slow down

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Condos are leading a revival of prices in the Vancouver region's housing market, but sales activity remains below the torrid pace of a year earlier.

The Real Estate Board of Greater Vancouver said Tuesday that the benchmark price for condos sold last month in its territory reached $554,100, up 8.2 per cent over the past three months and 16.6 per cent from April, 2016. Benchmark prices are the industry's representation of typical homes sold.

In the townhouse segment in April, the benchmark price hit $701,800, up 5.3 per cent over the past three months and 15.3 per cent from April, 2016.

Has home affordability actually improved in Vancouver?

After setting record highs for sales early last year, the number of 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 tax hit detached houses the hardest. Last month's benchmark price of $1.52-million for detached houses in Greater Vancouver fell 3.9 per cent compared with August, but is still up 8.1 per cent over the past year.

For all housing types, there were 3,553 transactions of existing properties on the Multiple Listing Service last month, down 25.7 per cent from a year earlier, though the sales volume rang in 4.8 per cent more than the 10-year average for April. The benchmark price for all housing types increased 11.4 per cent year over year to $941,100.

"Until more entry-level – or 'missing middle' – homes are available for sale in our market, we'll likely continue to see prices increase," real estate board president Jill Oudil said in a statement Tuesday. She noted that 68.5 per cent of sales in the first four months of this year have been for condos and townhouses, compared with 58.2 per cent during the same period in 2016.

Fewer luxury mansions are selling, dragging down the average price for detached houses to $1.77-million in Greater Vancouver last month, a 2.7-per-cent decrease from April, 2016. The average price for resale condos, by contrast, has surged 20.1 per cent over the past year to $634,723, while the average price for townhouses increased 8 per cent to $833,223.

Industry experts say the B.C. government's subsidy program for first-time home buyers, introduced in mid-January, has contributed to the run-up in entry-level property prices over the past three months.

Housing affordability has been a major issue during the provincial election campaign for both the BC Liberals and the BC NDP.

The benchmark price of a detached house in the Fraser Valley Real Estate Board's territory reached $888,900 in April, a 14.5-per-cent increase from the same month in 2016. The Fraser Valley board's sales volume last month dropped 24.9 per cent from a year earlier.

Many residents have cashed out of Greater Vancouver and the Fraser Valley to move to Victoria on Vancouver Island. There, the benchmark price for detached houses in the provincial capital's core has climbed 17.6 per cent over the past year to $805,100. The core encompasses Victoria and suburbs such as Oak Bay, Esquimalt and View Royal, as well as parts of Saanich.

In the broader area called Greater Victoria, the benchmark price for detached properties last month hit $663,500, up 16.8 per cent from a year earlier.

Ara Balabanian, president of the Victoria Real Estate Board, said Victoria City Council wisely reversed course last week by scrapping plans to ask the provincial government to slap a tax on foreign buyers in the capital.

"The issues that Vancouver and Toronto may have with regards to foreign buyers and speculators are much different than what we have in Victoria," Mr. Balabanian said in an interview. "I don't see any real reason to rush into a tax in our area."

Between June 10 and Feb. 28, foreign purchasers accounted for 4.5 per cent of residential transactions in the Capital Regional District, which includes Victoria and suburbs such as Oak Bay and Saanich. By comparison, foreign buyers accounted for more than 11 per cent of residential deals over the same period in the Vancouver suburbs of Richmond and Burnaby, according to data compiled by the B.C. government.