New mortgage rules driving condo price surge: Royal LePage
Metro Vancouver condo prices surged in the third quarter, according to a new real estate price survey released Thursday.
Royal Lepage’s survey found the median price of a condominium rose by 17.6 per cent year over year to $622,392, while the cost of a twostorey detached home dropped by 1.1 per cent to $1,532,849 over the same period. The price of a bungalow, however, went up 3.5 per cent to $1,422,458.
The survey showed the biggest jump in condo prices in Metro Vancouver was in North Vancouver, with prices rising 25.2 per cent year over year to $614,173.
Following North Vancouver were Burnaby at 24.6 per cent to $561,558 and Coquitlam at 23.8 per cent to $471,749. The Royal Lepage survey came the same day that the British Columbia Real Estate Association released monthly statistics showing home sales and average prices rose in B.C. in September.
The BCREA figures showed a total of 8,340 residential unit sales were recorded by the Multiple Listing Service during the month, an increase of 9.9 per cent from the same period last year.
Total sales amounted to $5.8 billion, up 30.2 per cent from September 2016, and the average MLS residential price was $693,774, up 18.5 per cent.
The BCREA also said residential unit sales declined 13 per cent year to date to 81,608 units while the average price was down 0.2 per cent to $705,501.
Randy Ryalls, general manager of Royal LePage Sterling Realty, said the high price of detached homes and tighter mortgage restrictions have pushed buyers into the condo market, placing a severe strain on inventory and driving competition.
As prices rise and affordability deteriorates, Ryalls said buyers are returning to the market in fear of being permanently priced out.
“Despite having already taken 30 to 40 per cent of entry-level buyers out of the marketplace entirely, the new mortgage regulations, and requisite stress tests, have helped to significantly drive condominium prices up,” said Ryalls, in a statement. “The cost of a down payment for a detached property in Greater Vancouver has already surpassed the average home price in many markets in Canada.”
He added that there is not enough supply to satisfy demand levels, noting that a balanced market needs about 14,000 to 15,000 listings, much more than the current 9,000 listings.
Overall, the aggregate price of a home in Metro Vancouver increased 2.5 per cent year over year to $1,229,133. Over the same period, the City of Vancouver saw an increase of 2.2 per cent to $1,439,652.
Langley, Surrey, North Vancouver, and Richmond saw thirdquarter price increases of 9.2 per cent, 6.3 per cent, 4.5 per cent and 1.4 per cent, to $831,283, $796,466, $1,417,226, and $1,103,064, respectively, according to the survey.
Cameron Muir, the association’s chief economist, said B.C. home sales rose nearly five per cent from August on a seasonally adjusted basis.
“Total active listings on the market continue to trend at 10-year lows in most B.C. regions, limiting unit sales and pushing home prices higher,” he said.
The median price of a condo in Metro Vancouver is up 17.6 per cent year over year, according to a Royal LePage survey.