Price increases hurt buyers looking outside Metro
Brian Lewis
Province
The fact that the Fraser Valley continues as one of Canada‘s fastest-growing regions is reflected each January when year-end real-estate-sales statistics are released.
So when the Fraser Valley Real Estate Board announced the region’s 2007 sales numbers last week, the news that average home prices again showed annual double-digit increases was hardly surprising, even though total sales fell slightly compared to the previous two strong years.
However, now we’re beginning to hear concerns over the region’s housing affordability, especially since these substantial value increases were also reflected in property-tax assessments for 2007 that were mailed out last week by the B.C. Assessment Authority.
As one community newspaper, the Chilliwack Progress, noted recently in a commentary on higher property values: “They should provide a cautionary note to city planners and politicians about the need to ensure that affordability remains a fact of life in Chilliwack.”
That cautionary note applies anywhere in the Valley because, like it or not, many downsizing empty-nesters or young first-time homebuyers from Metro Vancouver now look to the relatively lower-priced Fraser Valley.
This means the challenge will only increase for city halls throughout the Valley to manage robust growth and the accompanying demands for community services, schools, parks, hospitals, etc.
And, as the Progress editorial says, part of successfully managing this robust growth will be for city halls to ensure that developers provide a residential mix that includes affordable housing for first-time buyers and young families.
“A combination of affordable housing and a great lifestyle for people in the Fraser Valley are definitely the main attractions,” says Jim McCaughan, president of the Fraser Valley Real Estate Board.
“You’re close to major shopping malls or places like Cultus Lake and great fishing in the Vedder River. And many of our clients are families with young children looking for more affordable options,” he adds.
But the FVRB’s numbers show those affordable options are becoming more difficult to find.
The average price of a single family detached home in the Fraser Valley increased by 11.4 per cent last year to $520,317 from $467,252 in 2006. Townhouses jumped 12.7 per cent to $322,578 from $286,127 while apartments increased by 14.9 per cent to $216,990 from $188,789.
If prices in the Fraser Valley become equally unattainable, there will be no other alternatives for these families in the Lower Mainland.
The need to preserve as much Valley land as possible for food production also places additional pressures on the region’s residential land prices and inventory.
That’s why the emerging trend in Valley real estate is to build up, not out. In Chilliwack, Abbotsford and Mission, for example, detached housing is creeping up local mountainsides.
Regardless, B.C.’s strong economy and favourable mortgage rates will continue to feed the market in 2008, the experts say.
© The Vancouver Province 2008
