Greater Vancouver’s real estate market is being propped up by its condo sales, as the average price of detached homes drops, according to Royal LePage’s Q3 House Price Survey.
The real estate group’s survey found the median cost of a detached home in the region is down by 1.1.%, in comparison to the same period last year.
However, since $1,532,849 is still a massive amount to pay for a family home, it seems most of us are turning to the condo market.
In turn, Royal LePage found the median price of a condo in Greater Vancouver has increased by a huge 17.6%, compared to the same period last year.
That means the average price of a condo has risen by almost $100,000, skyrocketing from $529,033 to $622,392 in just one year.
In a release, Randy Ryalls, general manager, Royal LePage Sterling Realty, blamed affordability issues and new mortgage regulations.
He estimates the overall effect was that 30% to 40% of potential first-time homebuyers were taken out of the market, and many of those left could only afford a condo.
“Prospective purchasers have redirected their attention to condominiums, vying to enter the market before prices rise to levels that are simply beyond their reach,” said Ryalls.
This swift rise in demand for condos in Greater Vancouver – combined with a lack of supply – has only intensified competition and increased prices, said Ryalls.
“Frankly, an adequate amount of inventory could help to ease this trend, but there is simply not enough supply within the marketplace to satisfy current demand levels,” said Ryalls.
Ryalls said the shortage of condos is being made worse by cautious homeowners uncertain about trading up the property ladder.
“Historically, a balanced market in Greater Vancouver needs roughly 14,000 to 15,000 listings to run smoothly, yet currently, we have about 9,000.”
“As a result, many homeowners … have decided to find their next residence prior to listing their home, as they are wary of finding an adequate upgrade.”
Overall of course, the aggregrate average price of a home in Greater Vancouver was up as usual, rising to $1,229,133, up 2.5% from last year.
And the median price of townhomes had also risen, reaching $1,422,458, up 3.5% from this time last year.
However, those comparably small increases – and the drop in the price of detached homes – indicate a closing gap on the property ladder, found Royal LePage.
In short, it’s not so big a leap anymore from a condo to a townhome to a detached home – which is good news if you already own a condo and are looking to upgrade.
Plus, with owners of larger, detached homes perhaps struggling to sell for as much as anticipated, potential buyers have much more power at the negotiating table.
Royal LePage found real estate sales in West Vancouver – Canada’s most expensive market – limited due to high home prices.
In this quarter, West Vancouver average aggregate home prices dropped more than any other market in Canada, falling by 8.7% to $3,026,136.
Meanwhile, the average cost of a detached home in West Vancouver dropped by a huge 10.1%, to $3,431,446, compared to the same time last year.
OK – but seriously – as if any of us can afford that anyway. How about getting onto that property ladder to begin with?
Well, if you’re looking for the most affordable spot to buy a home, you might want to try buying a condo in Surrey. At $304,779, that sounds like a bargain to us.
All data provided by Royal LePage.
City of Vancouver – up 2.2%
West Vancouver – down 8.7%
North Vancouver – up 4.5%
Richmond – up 1.4%
Burnaby – up 6.3%
Coquitlam – up 6.8%
Surrey – up 6.3%
Langley – up 9.2%