Derrick Penner
Sun
For only the fourth time in the last 25 years, Greater Vancouver realtors made more than 3,000 multiple-listing-service sales.
The Real Estate Board of Greater Vancouver said 3,099 transactions were reported, an increase of 11.2 per cent compared with the same month a year ago.
New inventory, however, remained relatively unchanged with 4,819 in October compared with 4,862 in October a year ago.
The so-called benchmark price for a typical detached house was $730,022 in October, up 12.2 per cent year over year. The benchmark price for a Greater Vancouver townhouse was up 10.8 per cent to $454,645. The benchmark condominium apartment price was up 11.4 per cent year over year to $371,418.
“What we’re seeing is a buoyant market fueled by strong demand form both first-time and repeat buyers,” board president Brian Naphtali said in a news release.
Naphtali added that the region’s low unemployment and strong economy help support that demand.
Cameron Muir, chief economist for the B.C. Real Estate Association, added that the number of condominiums being built in Greater Vancouver helps the first-time buyers, but so do changes to mortgage terms that extend the amortization period.
Over the last year, Canada Mortgage and Housing has begun insuring mortgages with a 40-year amortization, which Muir said decreases the buyers’ monthly payment, giving them a chance at clearing the hurdle of qualification.
“A sizeable number of first-time buyers are choosing longer amortizations in order to get into a home now rather than wait,” Muir said.
Forecasts earlier this year predicted that Vancouver‘s high prices would have slowed sales by now, Muir said. He expects to see sales slow in 2008 as rising prices squeeze more buyers out of the market.
Patricia Croft, chief economist for Vancouver-based Phillips Hager & North Investment Management, said rapid price appreciation and relative unaffordability in Vancouver‘s market is its biggest concern.
“The laws of gravity haven’t entirely been repealed,” Croft added. “You never know exactly what the catalyst is for cooling in real estate.”
Croft said the factor that causes a market to cool could be mortgage rates, a weaker U.S. economy that lowers Canada‘s prospects or simply the sentiment of buyers in the market.
“At some point, you would expect to see things cool off [ in Vancouver],” she added. “But anybody who has waited for that has been disappointed so far.”
© The Vancouver Sun 2007
