The rush to Vancouver's suburbs has pushed up the proportion of single-family detached houses valued at $1-million or higher in the region, with the ripple effects being felt from Port Moody to White Rock.
More than 43 per cent of detached properties in Metro Vancouver had assessed values of at least $1-million on July 1, 2015, compared with 28 per cent on July 1, 2014, according to a new study by researcher Andy Yan, director of Simon Fraser University's city program.
In the District of West Vancouver, 98 per cent of detached houses were valued at $1-million or higher on July 1, 2015, compared with 95 per cent on July 1, 2014. The proportion in the City of Vancouver climbed to 89 per cent, compared with 62 per cent.
While real estate prices are sharply higher today, it was already common to see detached houses in the million-dollar club in the suburbs in mid-2015.
In Port Moody, a 45-minute drive east of Vancouver during non-peak hours, 31 per cent of detached properties had assessed values of at least $1-million in mid-2015, compared with 12 per cent in mid-2014. The proportion increased to 40 per cent from 30 per cent in White Rock, a 60-minute drive south of Vancouver, assuming no traffic jams.
Other suburbs that experienced jumps in the proportion of million-dollar detached houses include the District of North Vancouver (78 per cent in mid-2015, compared with 50 per cent in mid-2014), City of Burnaby (74 per cent; 38 per cent), City of North Vancouver (68 per cent; 33 per cent) and City of Richmond (61 per cent; 37 per cent).
Less-expensive suburbs include Coquitlam (22 per cent in mid-2015, compared with 8 per cent in mid-2014), New Westminster (16 per cent; 7 per cent) and Surrey (12 per cent; 9 per cent).
Based on data from BC Assessment, more than 169,700 detached properties in Metro Vancouver were assessed at $1-million or higher on July 1, 2015.
Property values are up significantly since the mid-2015 data, even with the slowdown in the housing market in recent months. Real estate assessments for detached houses in the Vancouver region soared from mid-2015 to mid-2016, according to BC Assessment, which will release the July 1, 2016, values in the new year.
The average price of detached homes sold last month exceeded $1.6-million in Greater Vancouver, which includes most of the communities that form the political entity known as Metro Vancouver. In the City of Vancouver, the price averaged more than $2.6-million for detached properties sold last month.
In a related analysis, Mr. Yan found that that while the suburbs are getting more expensive, the initial purchase price of a home is just the tip of the iceberg. He argues that homeowners far from downtown Vancouver too often neglect to factor in the costs of transportation when they calculate what they can afford.
"It looks small at the beginning, but when you look deeper in terms of longer, volatile cost, it can have a tremendous effect on affordability," he said.
For workers who take public transit, high housing costs in the Vancouver region translate into long commuting times. "You need to consider the commuting. A location that looks cheaper is actually quite expensive. It ends up to be very significant in terms of transportation costs and time," Mr. Yan said.
When calculating the present value of typical transportation costs over the next 25 years, suburban properties that seem like bargains wind up becoming expensive purchases, even in places such as the City of Langley, he said.
In August, the B.C. government implemented a 15-per-cent tax on foreign home-buyers in Metro Vancouver. And last week, the province announced a new program aimed at making it easier for B.C. residents to come up with down payments for their first-time purchase – in the case of the Vancouver region, that targets mostly condos and townhouses.