Prices in many areas have doubled since 2002
Derrick Penner
Sun
Jeff Starchuck [LEFT] and Grant Berjian opted to change location to get more house and less commute, which is indicative of choices buyers are making in the Lower Mainland’s high priced real estate markets. They are pictured in the kitchen of their new Abbotsford home. Rick Collins/ Special to the Sun
The Real Estate Board of Greater Vancouver and the Fraser Valley Real Estate Board use different standards for setting their pricing figures. REBGV defines a “benchmark” home as a “typical property” sold within Metro Vancouver, whereas FVREB calculates an “average” price from all sales in North Delta, Surrey, White Rock, Langley, Abbotsford and Mission.
Forecasters who had expected Lower Mainland real estate markets to moderate during 2007 instead saw sales rebound and price increases continue at rates that have doubled values in many markets over the past five years.
Greater Vancouver realtors processed 38,050 sales through the Multiple Listing Service in 2007, a figure 7.2 per cent higher than the previous year, but still 6.1 per cent off the record in 2005.
Prices were also up between 11.4 per cent on single-family homes for the year, and 14.4 per cent on condominiums.
Across the Real Estate Board of Greater Vancouver’s territory, the so-called “benchmark” the price for a typical single-family home hit $730,399 by December, almost 96 per cent higher than five years ago.
The benchmark townhouse price of $456,941 is slightly more than double what it was five years ago, and condominiums, with a $377,579 benchmark in December, are up 111 per cent.
Fraser Valley realtors processed 16,547 MLS sales in 2007, three per cent more than in 2006. Prices for single-family homes were up 11.4 per cent, and condos were up 14.9 per cent.
In the past five years, the average single-family house price in the valley has increased almost 92 per cent to $520,317. The average Fraser Valley townhouse price has risen almost 75 per cent to hit $322,578, and average condominium prices are up 93 per cent to $216,990.
Higher prices keep pushing buyers into smaller or more suburban properties. First-time buyers are going for condominiums, while people looking for more space are buying further away from Vancouver‘s core.
Banker Jeff Starchuk was among the latter, opting to trade an ordinary bungalow in Burnaby and a miserable commute to North Vancouver for a job transfer and an executive-style house in east Abbotsford.
“It was pretty well a straight-across trade,” Starchuk said of the new, 4,000-square-foot $650,000 house in a gated community he and his husband Grant Berjian were able to pick up.
The couple was perhaps disappointed to move out of Greater Vancouver, “but when you look at what you get [for housing] in relation, it’s probably not that big a sacrifice, unless I wanted to be downtown every day.”
Since taking possession two weeks ago, Starchuk has noticed that many other people are making the same trade. When he walks his dog at 6 a.m., he sees a stream of cars from his neighbourhood heading for the freeway.
“It’s young families, it’s people who want more for their money and want a lifestyle on the weekends that [doesn’t involve] tons of traffic,” Starchuk said.
Robyn Adamache, an analyst at Canada Mortgage and Housing Corp., said the 2007 sales numbers show that even in the Fraser Valley, prices seem to be pushing more people out of houses, with the region showing about five per cent fewer single-family home sales but almost nine per cent more townhouse sales and seven per cent more condo sales.
“So, maybe they’re moving to a larger type of multi-family as an alternative to single-family housing to get a bit of land,” Adamache said.
Adamache added that Lower Mainland markets did see prices begin to moderate, which she expects to continue through 2008, with the annual increase in the nine-per-cent range.
Cameron Muir, chief economist for the B.C. Real Estate Association, noted that most sales and housing starts in the Metro Vancouver area are either condominiums or townhouses, which is also a reflection of how buyer are adjusting their sights. “While there are some really high [prices] at the high end [of the market], there are a lot of condominium apartments being built at more affordable price points,” Muir said.
“And they’re making up a large number of overall sales.”
That shift toward higher density housing, Muir said, helped markets sustain higher levels of sales in an environment of rising prices, along with general consumer confidence and continuing changes in the mortgage markets.
Muir noted that many first-time buyers are leveraging their buying power with 40-year-amortization loans, which lower monthly payments.
Adamache added that there was a mid-year rush of buying in 2007 sparked by a bump up of mortgage rates.
Forecasters predict a relatively stable 2008, with lower sales and slower price increases, but Muir noted some uncertainties, including the effect of B.C.’s forest industry downturn.
