Metro Vancouver real estate prices forecast to keep climbing through 2017

Future housing ladder will be condo to condo, not condo to house, says Central 1 Credit Union economist

There's been a widening gap between the prices of detached houses in Greater Vancouver and either condos or townhouses.

New real estate forecasts predict Lower Mainland housing prices will continue their ascent to new highs over the next two years.

Central 1 Credit Union projects resale median residential prices of Greater Vancouver homes will climb 6.1 per cent in 2016 and 3.8 per cent in 2017.

Senior economist Bryan Yu says detached houses are becoming “luxury” real estate as “prices that far outpace income affordability fundamentals” increasingly put them out of reach of large portions of the population.

He estimates detached house prices will continue to run up faster – 10 per cent in 2016 and 6.6 per cent in 2017.

Although there may be “some froth” in detached house prices, Yu expects the growing price gap between houses and condos – now at a record $525,000 in Metro – will continue to widen.

That widening price gap will be “difficult if not impossible to bridge” for prospective new buyers and recent condo owners and will effectively be the new norm.

“In previous years, the housing ladder meant starting in a condo and transitioning to a detached home,” Yu said. “That will no longer be the trend. For most families, the housing ladder will lead from one multi-family unit to another.”

Increasingly scarce land is a reality of the region’s geography that’s hemmed in by the ocean, mountains, U.S. border and the Agricultural Land Reserve, he said.

His report says the trend of double-digit price gains shows little sign of stopping given a severe shortage of inventory in Metro Vancouver and limited land availability for low-density construction.

“Price momentum has also spilled into the neighbouring Fraser Valley area,” Yu said.

Continued record low interest rates and economic and job growth will continue to drive sales and further price momentum in Greater Vancouver through 2016, he added.

The B.C. Real Estate Association projects the Greater Vancouver market will see a 4.5 per cent increase in the average selling price for a residential home to $925,000 in 2016.

That average, which blends condos, townhomes and detached houses all together, is expected to reach $885,000 in 2015, up 8.9 per cent from $812,652 in 2014.

In the Fraser Valley, the average residential price is projected to have climbed 9.7 per cent to $568,000 this year, up from about $518,000 in 2014, and it’s projected to gain four per cent to $591,000 in 2016.

Chilliwack and district prices are estimated by BCREA to be up 6.9 per cent to $330,000 and projected to gain 1.2 per cent in 2016 to $334,000.

Many consumers have been forced to alter their housing expectations, especially near the urban core, the BCREA report says.

It notes City of Vancouver detached houses make up just five per cent of the total housing stock in Metro Vancouver and those house prices should not be used as a benchmark for affordability in the region.

And the report argues many detached houses are really in effect duplexes, triplexes or fourplexes “as a result of the exploding number of accessory suites.”

Just Posted

Money in to finish Lougheed Highway twinning

Feds announce $29 million to complete four laning of four-kilometre stretch in Maple Ridge

Campers expect 100 per cent online reservations at Golden Ears next season

Maple Ridge group has been fighting to keep drive in bookings

Maple Ridge council will be asked to declare climate emergency

Vancouver, London and Los Angeles have already done so

Pitt Meadows seeks partners in flood protection

$100 million in work needed to improve dike system

Maple Ridge senior facing homelessness at the end of the month

Jean Ticehurst can’t find affordable housing

Rich the Vegan scoots across Canada for the animals

Rich Adams is riding his push scooter across Canada to bring awareness to the dog meat trade in Asia

Former Fernie Ghostrider re-signs with Vancouver Canucks

Josh Teves has signed a two-year contract with the NHL team

Couple found dead along northern B.C. highway in double homicide

Woman from the U.S. and man from Australia found dead near Liard Hot Springs

Injured fawn at B.C. vet will be euthanized Friday night unless claimed by sanctuary

Gilbert the deer is currently being treated at West Kelowna’s Rose Valley Veterinary Hospital

BC Wildfire Service warns wet weather no reason to be complacent

Fire risk currently low for much of B.C. compared to same time over last two years.

Bank of Canada lowers qualifying rate used in mortgage stress tests

Home sales softened last year after the federal government introduced new stress test rules for uninsured mortgages

Trudeau says Ottawa open to proposals for B.C. refinery as gas prices soar

Prime minister says he knows B.C. residents are struggling and the federal government is open to ideas

Clock’s ticking to share how you feel about Daylight Saving Time in B.C.

Provincial public survey ends at 4 p.m. on Friday

Most Read