New mort­gage rules driv­ing condo price surge: Royal LePage

Vancouver Sun - - CITY - TIF­FANY CRAW­FORD ticraw­ford@post­media.com

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.

ARLEN REDEKOP

The me­dian price of a condo in Metro Van­cou­ver is up 17.6 per cent year over year, ac­cord­ing to a Royal LePage sur­vey.

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