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

Maple Ridge man to the rescue twice in 10 minutes

Karl Dey helped the VPD take down a violent sex offender

Maple Ridge magnetic hill defies the law of Newton

It is a stretch of road where cars roll uphill instead of down

Driver from 2005 vehicle dragging death in Maple Ridge dies

Grant De Patie killed while working at gas station

Crown drops one Vernon assault charge against Curtis Sagmoen

Curtis Wayne Sagmoen will still stand trial on one count of assault causing bodily harm in December.

Start of Maple Ridge B-Line bus service may be delayed

TransLink says new service could start next year, some time

After mosque attacks, New Zealand bans ‘military-style’ guns

The gunman killed 50 in a Christchurch mosque

Nowhere to grieve: How homeless people deal with loss during the opioid crisis

Abbotsford homeless advocate says grief has distinct challenges for those living on the streets

ICBC shifts to Alberta model, with higher rates, private insurers say

B.C. public insurance includes funding enforcement, driver licensing

B.C., feds accused of ‘environmental racism’ over Site C, Mount Polley

Amnesty International Canada says governments failed to recognize threats to Indigenous peoples

New Leger polls suggests federal Liberals lagging Conservatives

Overall, 31 per cent of respondents polled said they would vote for Justin Trudeau’s Liberals

Two men charged in Lower Mainland grocery store stabbing in 2018

Coquitlam RCMP say the incident is ‘believed to be targeted’

Number of homeless deaths more than doubled in B.C. as opioid crisis set in

New data shows trend between more overdose deaths and the number of people dying in the street

Four people spat on in ‘random, unprovoked’ assaults: Vancouver police

Police ask additional victims to come forward after woman in a wheelchair spat on

Most Read