Vancouver’s Housing Market Stays Strong

Real Estate in Vancouver is still a seller’s game. Despite a (very) slight trend downward in recent months, housing starts and prices are headed back up. Vancouver’s strength reflects the general trend all across the country. 2006 was a banner year for both starts and prices from sea to sea, and market analysts are forecasting a continued surge for 2007: sales are slated to rise by 3.6 percent nationwide, to 500,995, predicts the Canadian Real Estate Association.

In the strong national market, BC tops the heap. The province has the highest average resale price in the country, at $431,909 – up 11.1 percent over last year. And Vancouver tops cities here. The price for a detached home in Vancouver has risen 11.9 percent from last year: May’s average selling price was $682,173. An attached home has risen even more, up 13.8 percent (average price in May for an attached home was $482,299), but topping even that increase is the average price for apartments: at $349,393, it is up 14.7 percent.

Though housing starts in the month of April dipped (in some categories dramatically), Robyn Adamache, senior market analyst with the Canadian Mortgage and Housing Corporation, says that this dip does not reflect the trend for the year. “We do know a lot of projects in the pipeline, and the building permit numbers were up,” explained Adamache, who attributes the brief decline in starts to the labour shortage – there simply is not enough people to work on all those construction projects.

Indeed, the CMHC expects the housing market in Vancouver to stay strong over the next couple of years. Housing starts are predicted to match last year’s (and even increase marginally), at about 19,000. The resale market is also expected to hold strong --approximately 35,000 homes should be sold.

So what is the overall prediction? Adamach predicts that homebuyer demand will be solid both this year and next. “In both Vancouver and Abbotsford slightly fewer existing home sales will combine with a gradual increase in MLS listings to result in more balanced market conditions. This will help put the brakes on price growth. Expect single-digit price growth over the next two years rather than the double-digit increases we’ve seen year after year.”

And what of that ever-present “bubble” threat? TD Economics economist Carl Gomez says: don’t believe the hype. “Canada's red-hot housing market is on a solid foundation because there is very little evidence of speculative activity,” he reports, to Realty Times. Specifically, Gomez says that the huge boom in Vancouver’s condo development is particularly strong, despite some warnings that the condo market is becoming saturated. “Condos keep home ownership accessible to many potential buyers like younger people and recent immigrants,” he says. Good news for all those condo developers and sellers out there.