http://www.vancouversun.com/business/af ... story.html
The Vancouver market increasingly seems like an impossible barrier for me to overcome, and is an increasing source of stress.” That lament, from Dr. Sahriar Kabir, is similar to many others I regularly receive.
The newly graduated family physician, 26, says his fellow medical school colleagues are in the same boat, and “the situation is worse for many of my friends in other professions.”
Unhappily for Kabir, the list of reasons for the real estate price surge lately taking place in the Vancouver area just got longer.
“Below-average home listing activity,” was added by the Real Estate Board of Greater Vancouver to a bevy of forces creating a white-hot property market.
They include low interest rates, a limited stock of detached houses, a devalued Canadian currency, population growth (including provincial in-migration following Alberta’s fiscal downturn) and continuing interest from foreign buyers.
The real estate board reports that the number of properties listed for sale in the Vancouver region last month dropped nearly 20 per cent from a year earlier, creating a seller’s market and inspiring bidding wars.
Despite the fact prices have been going through the roof, the Canada Mortgage and Housing Corp. recently asserted Vancouver’s market is both sustainable and balanced, not a candidate for a price correction.
While the market may be sustainable and balanced, those scrutinizing the situation might also describe it as exasperating and merciless — how many folks can afford a million-dollar house?
It used to be possible for potential buyers to delay their purchase, with a goal of saving additional monies for a larger down payment. But these days, delay only places properties further out of reach because Vancouver-area prices are climbing so fast.
For example, if someone had waited one year to save additional cash for an east Vancouver detached home, its median selling price by now would have jumped by some $200,000.
Also, downward price corrections do not often materialize here and, when corrections do occur, tend to be modest, and brief.
While Vancouver’s Consumer Price Index grew one per cent in the past year, the typical price for all types of residential property grew 8.5 per cent; and, over the past decade, 73.3 per cent.
Neighbourhoods where prices for all types of residential units increased more than 10 per cent over the past year include Ladner, North Vancouver, Squamish, Tsawwassen and West Vancouver.
Prices for single-family detached houses, meanwhile, have increased, over the year, by as much as 16.2 per cent on the east side of Vancouver, nearly 16 per cent in North Vancouver, and 15 per cent in Ladner. West side Vancouver prices grew 13 per cent.
Similarly, people owning detached homes over the past decade have been sweepstakes winners, recording home equity gains to die for. The typical price for a detached home in east Vancouver is up 128.7 per cent since 2005.
On the west side, the price is up 153.4 per cent. Burnaby north and south, Richmond and West Vancouver all experienced increases in their detached home prices greater than 100 per cent since 2005.
Across Greater Vancouver, in the past 10 years, prices for detached homes have ballooned by nearly 97 per cent.
Townhouses and apartments have not increased in price as much as detached homes over the decade, although on the east and west sides of Vancouver, increases have been in the range of 70 per cent.
Of course, over time, price dips in the Metro Vancouver market have taken place. But new highs are quickly reached thereafter.
A real estate board graph, tracking the path of average residential prices from 1977 to 2015, reveals a slow, steady climb upward, with a shallow downward dip through 2008 and 2009, and another in 2012.
The clear, and frustrating, message from board data for the Vancouver region is that, for those who put off their purchases in hope of better circumstances, catching up is hard to do.