National average housing price increases are not nearly as robust as the headlines make them out to be when the priciest sales in Vancouver are taken out of calculations, says the Urban Futures Institute.
In its new Averages and Anecdotes: Deciphering Trends in Real Estate Prices report, Urban Futures crunched Canada’s housing prices and found that the national average – and the average for the Lower Mainland – are skewed by a relatively small number of sky-high sales, like the $17.5 million that a single penthouse suite in Vancouver sold for last year.
“If you net out those sales in the Lower Mainland, the price increases at the national level are a lot lower,” Urban Futures director Andrew Ramlo told Business in Vancouver.
“The question that just begs to be asked, then, is: If those multimillion dollar sales are skewing the national average, what is it doing for the local picture in terms of housing prices?”
The average price for a single detached home in the Lower Mainland rose 15% in 2010 to $810,000.
But the top 20% had average sale prices of $1.7 million.
When all the high-end sales are taken out locally, the year over year price increase for 2009-10 in the Lower Mainland drops from 15% to 10% for a single detached home, and from 12% to 4% for condos and apartments.
That reduces the average price of a single detached home in the Lower Mainland to $590,000 from $810,000, Ramlo said.
Nationally, there was an 8.9% increase in housing prices in 2011's first quarter. But when Greater Vancouver is taken out, that increase drops to 4.3%, according to the study.
Nelson Bennett
Twitter: nbennett_biv