Detached-house prices hit record high
Benchmark single-family home surpasses $1 million in Lower Mainland for the first time
Single-family house price increases easily outpaced the rising value of all other Lower Mainland housing types last year, with the benchmark price of a typical Greater Vancouver detached home topping the $1-million mark in December.
The value of that typical single-family property rose by 8.1 per cent last year to $1,002,200, according to figures released Monday by the Real Estate Board of Greater Vancouver.
It’s the first time the year-end benchmark price has surpassed $1 million.
“The 2014 market was very much driven by the detached housing market because there was a lack of product in certain areas,” board president Ray Harris said in an interview. “You might have thought prices would have increased by more than 8.1 per cent, given that situation.”
He noted single-family homes represent a declining portion of B.C.’s total housing stock, with the majority of new housing starts coming in the form of townhouses and apartment condominiums.
“That totally changes the dynamics of the housing market and it’s probably why we’ve seen slower growth in (the value of) apartments and townhouses,” Harris said.
The board said the benchmark price for Greater Vancouver townhouses rose by 4.5 per cent last year to $476,800 while the apartment benchmark price increased by 3.5 per cent to $380,700.
Total Multiple Listing Service residential sales rose by 16.1 per cent in Greater Vancouver last year to 33,116.
It was a similar story in the Fraser Valley market last year, with total MLS residential sales increasing by 16 per cent to 15,840 and single-family house price increases leading the way.
The Fraser Valley Real Estate Board said its single-family home benchmark price rose by 4.3 per cent last year to $573,100 while the townhouse price remained virtually unchanged at $293,500. The benchmark price for Fraser Valley apartments fell 0.8 per cent to $191,100.
“New developments created a glut of condos so they were down a bit on price,” Fraser Valley board president Ray Werger said. “But 2014 was a nice steady market overall. It wasn’t super hot, but it produced a steady stream of sales.”
He expects a similar market this year but noted the current number of active listings has fallen significantly from a year ago, down 15.4 per cent to 6,380.
“That’s a bit of a concern going forward, but I think listings will pick up in mid-January, which they usually do,” Werger said.
Some recent economic forecasts predict interest rates could increase by 50 to 100 basis points in the second half of 2015, which might curtail housing sales.
“Rising interest rates could have a temporary cooling effect on the market until things stabilize but we don’t see rates rising out of control,” Harris said.
Werger said the prospect of higher interest rates this year could create a temporary spike in home sales as buyers take advantage of the lower rates while they last.
“That can create a two-or-three-month push in sales before things cool down,” he said. “Rising rates might take out some first-time buyers who were right on the edge of qualifying for a mortgage, but I doubt it would have a huge impact.”