“Critically” low inventory levels combined with growing demand fueled a growth in Metro Vancouver home prices during the first three months of 2018.
Those are the latest findings from a new report, released today by Royal LePage.
“Greater Vancouver’s real estate market continues to be defined by low supply levels,” said Randy Ryalls, general manager, Royal LePage Sterling Realty. “As we have seen time-and-time again, the effects of demand-side policies are largely short-lived.”
The only way to create a “healthy” and sustainable market, he added, “is by increasing the amount of available inventory across the region.”
According to the report, the first quarter of 2018 saw continued interest in the market from Canadian and international buyers.
Meanwhile, “unintended side effects” of the new mortgage regulations also spurred demand in the entry-level segment of the market, causing condominium prices in particular to soar.
As a result, the aggregate home price in Greater Vancouver experienced double-digit growth, rising 10.3% year-over-year to $1,280,014.
When broken out by housing type, the median price of a condominium surged by 19.8% to $668,342, and the median price of a bungalow grew 6.2% to $1,437,873.
The median price of a two-storey home experienced strong, near double-digit growth, rising 9.6% to $1,602,291.
“As it stands, we would need roughly 5,000 more homes on the market today to ensure steady, sustainable price growth,” said Ryalls. “Until that happens, even the slightest uptick in demand has the potential to cause pricing to skyrocket.”
Royal LePage said the increase in home prices is also brought on homeowners hesitant to list their homes for fear of not being able to find an alternative once sold, which in turn diminishes the supply of homes for sale across the region.
This is a 29.7% decrease from the 3,579 sales recorded in March 2017, and a 14% increase compared to February 2018 when 2,207 homes were sold.
Sales in March were also 23% below the 10-year March sales average.
There were 6,542 home sales on the Multiple Listing Service (MLS) in Metro Vancouver during the first quarter of 2018 – a 13.1% decrease from the 7,527 sales over the same period last year.
This represents the region’s lowest first-quarter sales total since 2013.