Over the last year, market conditions in the Greater Vancouver area have been stable and we've seen a balance between buyer demand and seller supply. Prices have been rising continuously across the board, and that trend didn't stop in March. However, the big picture doesn't say much about trends in the diverse areas of Greater Vancouver, nor about the changes in buyer preferences when it comes to property types.
Vancouver Skyline By I am I A M
Jay's Comments on the Real Estate Market in Vancouver
Official comments on the March real estate market state "slow and steady" sales and less volume than the past ten-year average.
One reason for less volume could be the tightening of mortgage and insurance rules over the last couple of years. It is more challenging for first-time buyers today to qualify for financing when they have less than 20 per cent down (includes almost everyone!). In 2007, buyers could amortize their mortgage over 40 years to reduce their monthly qualifying payments and buy for 0% down.
The move-up market is affected by affordability and reduced numbers of qualified buyers at the entry level. Townhouses are being purchased by many boomers who are selling their family homes to builders for infill new homes and moving down. With reduced first-time buyers, it is more difficult for condo sellers to move up to townhomes or detached homes.
Much of the choking off of the real estate activity was at the order of Jim Flaherty when he was Minister of Finance. He asked the banks to raise their mortgage interest rates and CMHC to raise the cost of mortgage insurance. Joe Oliver, the new Finance Minister, has indicated that banks should be free to set their own lending rates and that maybe CMHC could look at graduated mortgage insurance rates depending on the location of the property and the covenant of the buyer.
He seems to be acknowledging the important role that real estate sales and their spinoff businesses play in the economic recovery. We shall see.
March 2014 Vancouver Real Estate in Numbers
Residential property sales increased 12.5 per cent, reaching 2,641 compared to the 2,347 recorded in March 2013. This is still 17.2 per cent below the ten-year average of 3,190. The benchmark price for all residential properties in Metro Vancouver was $615,200, which is 3.7 higher than a year before.
Detached homes sold well, with a 19.6 per cent increase in sales volume, reaching 1,116 properties in March 2014. The benchmark price in this case rose considerably, by 4.2 per cent to $945,400.
Prices in Vancouver West and Vancouver East jumped 6.1 per cent and 5.7 per cent, respectively. The benchmark price for Vancouver West was $836,100, and Vancouver East had a benchmark price of $632,000. The benchmark price for a property in Richmond was $582,700, which is a 3,5 per cent increase year-over-year. If you're looking for a single-family detached home, you should consider that the benchmark price for this property type in Richmond was $954,000, a slight 1.7 per cent increase from March 2013 to March 2014.