Greater Vancouver condo prices rise despite tumbling sales

[Source: The Globe and Mail,  March 2, 2017]

Prices for condos and town homes are climbing in Greater Vancouver, despite tumbling sales.

Sales of detached houses, condos and town homes fell to 2,425 transactions last month, down 41.9 per cent when compared with 4,172 deals a year earlier – a record high for the month of February.

Total sales volume last month rang in 7.7 per cent under the 10-year February average. But the number of residential transactions last month rose 59.2 per cent compared with January, marking the first time that sales have increased month over month since March, 2016.

Last August, the B.C. government implemented a 15-per-cent tax on foreign home buyers in the Vancouver region, contributing to the real estate market’s slowdown.

In January, the province’s new program aimed at making it easier for B.C. residents to come up with down payments for their first-time purchase took effect. In the case of the Vancouver region, that initiative targets mostly condos and townhouses.

The price of detached houses sold in Greater Vancouver last month averaged $1.76-million, down 3.2 per cent compared with $1.82-million in February, 2016. By contrast, average condo prices in the area over the past year have jumped 13.7 per cent to $603,737, while average town home prices have risen 10.8 per cent to $827,893.

Vancouver real estate agent Steve Saretsky, who specializes in the condo market, said it is too early to determine the impact of provincial incentives for first-time buyers. But he pointed out that while bidding wars have largely disappeared for detached houses, they are a common sight in condo sales.

“The new program certainly isn’t going to help condo prices level out,” Mr. Saretsky said in an interview Thursday.

Under the program, the B.C. government matches down payments of up to $37,500 made by first-time buyers purchasing a property valued at up to $750,000.

Mr. Saretsky noted that fresh listings for various housing types in Greater Vancouver last month slid 36.9 per cent compared with February, 2016. “Condo demand isn’t crazy but new listings are low,” he said.

The benchmark price for detached houses, condos and town homes hit $906,700 last month, a 2.8-per-cent decline over the past six months but up 14 per cent since February, 2016, according to the Real Estate Board of Greater Vancouver. The benchmark price is the industry’s representation of typical properties sold.

“While home sales are not happening at the pace we experienced last year, home seller supply is still struggling to keep up with today’s demand. This is why we’ve seen little downward pressure on home prices, particularly in the condominium and town home markets,” board president Dan Morrison said in a statement.

He said snowy weather last month also hampered sales activity.

The board’s territory covers the City of Vancouver and nearby suburbs such as Burnaby and Richmond.

Greater Vancouver is part of the broader area called Metro Vancouver, which includes suburbs such as Surrey and Langley in the Fraser Valley Real Estate Board. Sales in that board’s territory dropped to 1,396 last month, down 41.5 per cent from a year earlier.

The Fraser Valley board saw a benchmark price of $859,300 for detached houses sold in February, up 20.4 per cent from the same month last year, while benchmark prices for condos and townhouses have experienced sharp increases of more than 25 per cent.

On Vancouver’s west side, the benchmark price for detached houses reached $3.42-million last month, a 5.4-per-cent decrease from last August, but up 13.9 per cent from February, 2016.

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