Jan 2015 12

Benchmark Home Price Over $1 Million in Vancouver

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8093044774 39282cd2bb kYaletown Condos, George Wainborn Park by colink.

Metro Vancouver housing had a banner December 2014 with the benchmark price for detached homes coming in at over $1million. This is an 8.1% increase over the same period a year earlier.

The highest demand and the lowest inventory is in the detached class of housing. Bidding wars have erupted again. Much of this demand is being driven by buyers from Mainland China.

It's not clear yet whether the City of Vancouver's new rules regarding demolition of pre-1940s housing stock and recycling materiel from razed homes will impact home sales there. Surrounding municipalities like Richmond and North and West Vancouver with less onerous building bylaws may benefit from buyers who want a totally new home, not a renovated 80 year old home.

Condominium construction is expected to surge along the transit lines. The Canada Line from Richmond to downtown Vancouver is already having a major impact in the formerly single family neighbourhoods along Cambie Street.

The success of the upcoming transit referendum which would raise the sales tax slightly in the Lower Mainland to pay for subways and light rail transit would cause waves of new condo and commercial construction along the new routes.

There is always talk these days of the high levels of household debt in Canada and how that is impacted by the affordability of housing. Many news sources have been speculating on the sudden fall of oil prices and how it affects the consumer. It appears to offer a huge increase in income to the average household as the cost of fuel has been halved.

The Bank of Canada has been quoted as saying the housing market is overvalued by 10-30%.

but a "soft landing" is expected. This projection is contradicted by many reliable real estate sources who forecast continuing demand. The RE/MAX Report for 2015 expects at least a 3% increase in house prices in Vancouver and 4% in Toronto.

With the world in such turmoil Vancouver is looking like a safe haven for international money. The expectation is that the downsizing of the boomer generation and overseas investments will continue to fuel the market in 2015.


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