A diminishing supply of detached homes in Vancouver led to a dramatic price increase for this home type in 2015’s second quarter, according to Royal LePage
The average price for a detached home in Vancouver was $1,247,125 in Q2, which is up 12.6% compared with the same period last year.
“There is a finite supply of detached homes and they continue to be one of the most desired property types by a wide range of buyers,” said Royal LePage Westside manager Chris Simmons.
Prices were up for all home types as two-storey homes saw a 13.6% jump to an average sale price of $1,368,125 and condos increased 6% to $521,425.
“Average prices for homes in Vancouver continued their sharp ascent in the second quarter as a result of high demand and tight supply,” said Royal LePage Northshore broker Bill Binnie.
“Vancouver is a highly sought-after destination for homebuyers with a very limited supply of properties, which puts the market firmly in the hands of sellers.”
The real estate company said it forecasts 2015 will see average prices grow by 9.4% in Vancouver over the year compared with 2014. This increase is expected across all home types.
“The market is firing on all cylinders,” Binnie said. “The low interest rate environment is encouraging many buyers to make their purchase now while the rates remain attractive.”
Many analysts anticipate the Bank of Canada will cut the overnight rate July 15 to 0.5%, which the company said could “over-stimulate” the markets in Vancouver and Toronto.
“There is little indication that demand will taper off in the short term,” Binnie said.
According to Simmons, the diminishing supply of other home types will lead to growth in the sale of condos as buyers gravitate to other options.
Across Canada, the price of detached homes increased 7.5% year-over-year to $438,938. The average two-storey home sold for $471,002, up 6.8%, and condos were up 3.9% to $268,583. Royal LePage said it expects the average Canadian home price to be up 6.1% over the year, which will be largely driven by the markets in Vancouver and Toronto.
Data from the British Columbia Real Estate Association (BCREA) released the same day as Royal LePage’s report found that last month was the second-strongest June on record for overall sales across the province. A total of 11,294 units were sold across B.C. for the month – up 25.6% compared with June 2014. More significant was the total dollar volume of $7.1 billion, which was an increase of 42.6%.
“A growing provincial economy and record low borrowing rates continue to push demand higher, particularly in the Lower Mainland.”
Teranet also released its latest data July 14, showing an 8.48% year-over-year change in the average sale price of a Vancouver home in June. This measure looks at an aggregation of home value changes for homes that have been sold multiple times over a given period of time.
