According to the latest released report of MLS’s Home Price Index (HPI), the Great Vancouver real estate market in February and March 2012 experienced steady growth. The benchmark price of housing in Greater Vancouver for March 2012 was $607,700, an all-time high. Meanwhile, there were some changes in the Canadian housing market that may help us to predict future trends.
Vancouver House by Jhayne
In the March 2012, the HPI for Greater Vancouver reached 161.8 per cent, which represented a 1.06 per cent increase from February 2012. This was well below the average HPI across Canada, which was a 1.33 per cent increase and reached 152.9 per cent of the aggregate value. The fastest growth was seen in Greater Toronto, where it reached 1.65 per cent and reached the number of 147.6 per cent of the HPI. A slowing in the pace of increase in the HPI index in Greater Vancouver can be observed in the last three months. The difference between the whole of Canada and Greater Vancouver was 0.54 per cent, as Greater Vancouver rose 2.08 and Canada 2.62 per cent. The difference was even bigger in comparison with Greater Toronto, where the three-month HPI growth reached 3.14 per cent.
What conclusion can we draw from this data? First we can see that the situation in Toronto resembles Vancouver two or three years ago. The construction of condos, which amounts to a modern style of living, attracts many people who are looking to purchase more affordable housing. Toronto Home Sale Value Swings show how many different areas experienced fast price growth in just one year. New condominiums are constantly changing the shape of the real estate market there (as they have been doing in Vancouver) and it appears as though Toronto has stolen Vancouver's mantle as the hottest real estate market in the country.
In comparison, Vancouver is more conservative and condominiums are not the hot segment of the real estate market. Condos are the affordable option in Vancouver because of their smaller size and marketing towards single-person households. The highest prices for condos are generally limited to the downtown core.
We can conclude that the Vancouver real estate market has begun to regulate itself. Recent declines in average housing prices and an increase number of new listings (according to the last report of the Real Estate Board of Greater Vancouver) support this claim (although there are also some areas that are still doing extremely well).