Low interest rates, demand from overseas buyers and limited supply drove up Vancouver housing prices in 2011’s first quarter of, relative to the year prior, according to a Royal LePage House Price Survey released this morning.
The survey noted that two-storey houses posted the largest increase. They rose 9.7% year-over-year to an average sale price of $1,083,750, while detached bungalows followed with an 8.2% increase, selling for an average of $980,000.
It further noted that condominiums, while in better supply, still rose 7.8% to an average price of $507,250.
“Continued low interest rates remain the most influential factor,” Royal LePage North Shore owner and broker Bill Binnie said in a news release. “However, demand from mainland Chinese buyers continues to be strong and impact the market.”
The survey notes that new listings are down slightly since last year and that well-priced homes are attracting multiple offers.
It also notes that on Vancouver’s West and East sides, a standard two-storey home sold for an average price of $1.5 million and $765,000, respectively. It says that in those two areas, rezoning for higher density is decreasing single family home listings.
“Vancouver West Side price increases have been the most significant,” Royal LePage Westside & City Centre owner and broker Chris Simmons said. “Again, the reason is mainland Chinese buyers looking for detached, single-family homes.”
Royal LePage CEO Phil Soper commented that Canada and Vancouver may have reached a peak in its enthusiasm for residential housing.
“While it’s very rare, if you look over the decades, for home prices to back up, I don’t think we’re going to see the kind of appreciation for the next couple of years that we saw either post-recession or pre-recession.”
Soper added that a key reason for this is interest rates, which he expects to rise from “emergency low levels” to “low normal levels” within the year, and which will impact affordability.
Royal LePage calculates city-wide Vancouver averages by incorporating Vancouver West Side, Vancouver East Side, North Vancouver and West Vancouver.