Despite home prices dropping on a quarterly basis for the first time in four years, a new report suggests the housing market in Metro Vancouver is beginning to rev up once again.
Early evidence suggests the recent correction in Vancouver’s housing market may be short-lived, rebounding far sooner than expected. The realty firm says Canada’s two largest real estate markets continued their divergence in the first quarter of the year.
The aggregate price of a home in the Greater Toronto Area went up by 20 per cent in the first three months of this year to about $759,241. In the Greater Vancouver area, the price of a home rose 12.3 per cent year-over-year to $1,179,482.
No area has grown more over the last year than Langley where prices have jumped 21.2 per cent to an average of $794,213. Surrey remains the most affordable at $763,806. And the most expensive area is West Vancouver where the average price for a home is $3,306,286.
The correction in Vancouver began seven months ago, around the same time the provincial government introduced the 15 per cent foreign buyers tax to try and cool the market. Sales volumes then plunged and prices slowed. However, in the past month, sales in the Vancouver area have jumped by close to 50 per cent on a month-over-month basis.
It is possible that six months of pent-up demand will be unleashed on the market, sending prices sharply upward again; this when the pre-intervention 2016 trend was a natural market slowdown based on eroding affordability.
Across the country, the aggregate price of a home grew 12.6 per cent year-over-year to $574,575 during the first quarter.
The price of a two-storey home climbed 13.9 per cent year-over-year to $681,728, while the price of a bungalow rose 10.9 per cent to $490,018. Condo prices increased by 8.9 per cent to $373,768.
In Calgary, home prices were up only 0.6 per cent to $461,635, while in Edmonton they rose 0.3 per cent to $381,733.
Canadian home sales jump
The Canadian Real Estate Association says home sales last month hit a record high.
The association says home sales over its Multiple Listings Service system increased by 1.1 per cent in March to top the previous monthly record set in April 2016.
Sales were up on a month-over-month basis in more than half of the local markets measured, led by Greater Vancouver and the nearby Fraser Valley.
Compared with a year ago, sales were up 6.6 per cent as gains in the Greater Toronto Area led the way.
Finding a solution for affordable housing
The Greater Vancouver Board of Trade is out with a list of suggestions and recommendations for addressing the affordable housing issue. A forum is being held on the issue later today and one of the keys is something called “the missing middle.”
That term refers to a number of different multi-unit housing styles like courtyard apartments, triplexes or laneway homes (currently only available to renters), targeted at those in need of affordable options and often for people transitioning from single-family homes to higher density.
Board Chair Iain Black says it’s something often overlooked or ignored by planning departments. “If all the municipalities start to use a lens of the missing middle on all of their discussions when it comes to development policy i.e. What’s going to get built and land policy, i.e. Where’s it going to get built? Then this issue will get addressed in due course.”
He adds the affordable housing crisis across the region is hurting our economic prosperity. “If we want to attract 25 to 35-year-olds, who are the key to driving our economy forward from this point, we need to address housing demand for that demographic. Cities are the key drivers in this conversation.”
Black admits increasing density is a necessity when it comes to creating more supply. “More variety does mean more density. Because there are many different types of housing that we currently haven’t embraced yet. And if you look at other major cities in the world with a 100 or 200-year head start, they’ve already got all these various housing options already being implemented in the different communities,” says Black.
The board also wants more of a regional approach to the problem. “We’ve got a housing affordability issue because of the high demand for housing coupled with inadequate volume and the lack of diversity in terms of the type of housing available. And various options that people have in terms of getting into that housing, ownership, rental, co-ops, et cetera,” says Black, expanding the idea to include bungalow courts, multiplexes and live-work spaces.
Streamlining the development approval process by allowing for concurrent applications is also on the list. The board also calls for a uniform development approach across the region and pre-zoning for transit-oriented development near transportation hubs.