Metro Vancouver real estate prices forecast to keep climbing through 2017

Future housing ladder will be condo to condo, not condo to house, says Central 1 Credit Union economist

There's been a widening gap between the prices of detached houses in Greater Vancouver and either condos or townhouses.

New real estate forecasts predict Lower Mainland housing prices will continue their ascent to new highs over the next two years.

Central 1 Credit Union projects resale median residential prices of Greater Vancouver homes will climb 6.1 per cent in 2016 and 3.8 per cent in 2017.

Senior economist Bryan Yu says detached houses are becoming “luxury” real estate as “prices that far outpace income affordability fundamentals” increasingly put them out of reach of large portions of the population.

He estimates detached house prices will continue to run up faster – 10 per cent in 2016 and 6.6 per cent in 2017.

Although there may be “some froth” in detached house prices, Yu expects the growing price gap between houses and condos – now at a record $525,000 in Metro – will continue to widen.

That widening price gap will be “difficult if not impossible to bridge” for prospective new buyers and recent condo owners and will effectively be the new norm.

“In previous years, the housing ladder meant starting in a condo and transitioning to a detached home,” Yu said. “That will no longer be the trend. For most families, the housing ladder will lead from one multi-family unit to another.”

Increasingly scarce land is a reality of the region’s geography that’s hemmed in by the ocean, mountains, U.S. border and the Agricultural Land Reserve, he said.

His report says the trend of double-digit price gains shows little sign of stopping given a severe shortage of inventory in Metro Vancouver and limited land availability for low-density construction.

“Price momentum has also spilled into the neighbouring Fraser Valley area,” Yu said.

Continued record low interest rates and economic and job growth will continue to drive sales and further price momentum in Greater Vancouver through 2016, he added.

The B.C. Real Estate Association projects the Greater Vancouver market will see a 4.5 per cent increase in the average selling price for a residential home to $925,000 in 2016.

That average, which blends condos, townhomes and detached houses all together, is expected to reach $885,000 in 2015, up 8.9 per cent from $812,652 in 2014.

In the Fraser Valley, the average residential price is projected to have climbed 9.7 per cent to $568,000 this year, up from about $518,000 in 2014, and it’s projected to gain four per cent to $591,000 in 2016.

Chilliwack and district prices are estimated by BCREA to be up 6.9 per cent to $330,000 and projected to gain 1.2 per cent in 2016 to $334,000.

Many consumers have been forced to alter their housing expectations, especially near the urban core, the BCREA report says.

It notes City of Vancouver detached houses make up just five per cent of the total housing stock in Metro Vancouver and those house prices should not be used as a benchmark for affordability in the region.

And the report argues many detached houses are really in effect duplexes, triplexes or fourplexes “as a result of the exploding number of accessory suites.”

Just Posted

Giddy Up – annual Mustang car show comes to Langley

The Mustang has been on the market for 55 years, and owners gather to celebrate the iconic Ford.

VIDEO: Nothing but Summer and the the Boys of Fall

Langley country musicians Dallas Smith and Chad Brownlee host 7th annual charity golf tournament

Shamrocks headed to finals in Minto Cup at LEC

The lacrosse championships are down to two teams

Rams trounce Valley Huskers for third straight win

The Langley Rams are 3-0 this season so far

Bodies of two missing Surrey men found near Ashcroft: RCMP

Ryan Provencher and Richard Scurr have been missing since July 17

Officials say 50 Oppenheimer Park residents have agreed to leave, as deadline looms

Residents have been told they must be gone by 6 p.m. on Aug. 21

Five hedgehogs quickly adopted after being left at BC SPCA

Lucky new owners picked up their pets from Maple Ridge branch on Aug. 20

B.C. cricket players get interrupted by racist remark

Community has had protocols in place for years to respond to prejudice

Groovy B.C. wedding a throwback to Woodstock ‘69

Couple hosts themed wedding 50 years after legendary festival

‘Do the right thing,’ implores sister of South Surrey stabbing victim

IHIT confirms male arrested in connection with Paul Prestbakmo’s death no longer in custody

Nearly 50% of Canadians experience the ‘post-vacation blues’: poll

48 per cent of travellers are already stressed about ‘normal life’ while still on their trip

More women may need breast cancer gene test, U.S. guidelines say

Recommendations aimed at women who’ve been treated for BRCA-related cancers and are now cancer-free

Most Read