Vancouver real estate news for January 2008

Vancouver for Homes Monthly Newsletter

Welcome to our newsletter on Vancouver’s real estate market. We are here to help you buy or sell real estate in the Greater Vancouver area and through our partners in many areas of B.C.

January 2008

TRENDS IN HOME CONSTRUCTION

I am not talking about home styles - the rise of the craftsman and demise of the tudor style! Rather the trend that suggests new detached houses are becoming a rarity in Metro Vancouver.

Canada Mortgage and Housing Corp. (CMHC) reports that multi-family units made up 80% of all new homes started during 2007. There were 20,736 new home units started in 2007, the highest since 1993. But detached houses accounted for only 4,211 of those, the lowest proportion (20%) since 1961.

The bulk of the multi-family developments in 2007 were apartment condominiums. The price of single family homes is the main factor in driving buyers towards apartments.

It is worth noting that even in more spacious suburbs, like Langley or Maple Ridge, multi-family home starts outstripped starts for detached homes. So it is not always lack of land that prompts the construction of multi-family housing.

Helmut Pastrick, chief economist for Credit Union Central B.C said he expects housing construction to decline in 2008 as rising prices and mortgage rates, which eased during the latter half of 2007, squeeze more buyers out of the market. “At the margins, I see demand growing at a slower pace and supply growing at a faster pace,” Pastrick said.

Pastrick noted that most developers depend on a significant proportion of pre-sold units to fund their development. This will ensure that there is not an over-supply of units.

Pastrick expects “a fairly normal to mild adjustment” in Metro Vancouver real estate markets over the next two to four years.

REAL ESTATE MARKET

2007 - ANOTHER (NEARLY) RECORD BREAKING YEAR

Last year we saw housing sales at the second highest level ever recorded by the Real Estate Board of Greater Vancouver (REBGV). The highest level was in 2005. Total property sales were 38,050 for 2007 - a 7.2% increase from 2006.

It has generally been a seller’s market this year. Overall, new listings for all types of property, increased by 4% in 2007, which has helped buyers to a limited degree. The pressure on buyers has been at a several points in the market, most notably at the lower end of each class of property. For instance the lowest priced detached homes, entry level townhouses. Buyers generally end up competing for properties which are well presented and have little or no work to be done.

We have noticed a trend toward renovation here on the north shore. One of our clients from the UK remarked that Canada was catching up on the UK in the renovation boom. We believe this is because sellers are wary of listing their homes when they see so few suitable properties available - preferring instead to renovate rather than move. Renovation will also make their properties more desirable (and expensive) when they do come to sell.

METRO VANCOUVER BENCHMARK

The Vancouver Real Estate Board publishes a benchmark that tracks the price of a benchmark property across the region. There are three categories:

Detached
These are houses, sometimes called single family homes
Attached
This refers to townhouses and half duplexes.
Apartments
This means apartments within high or low rise buildings.

I have set out the benchmark prices across the region, with the annual percentage price rises in brackets.

DETACHED BENCHMARK PRICES

Greater Vancouver $730,399 (13.5%)
Burnaby $745,160 (12.8%)
Coquitlam $614,075 (8.4%)
South Delta $654,500 (13.5%)
Maple Ridge $437,131 (4.8%)
New Westminster $557,016 (13.2%)
North Vancouver $871,191 (18.1%)
Pitt Meadows $467,514 (2.9%)
Port Coquitlam $551,469 (17.1%)
Port Moody $620,193 (-8.7%)
Richmond $722,316 (13.2%)
Squamish $505,208 (20.6%)
Sunshine Coast $406,146 (3%)
Vancouver East $678,179 (14.3%)
Vancouver West $1396,490 (27.1%)
West Vancouver $1339,990 (10.5%)

ATTACHED BENCHMARK PRICES

Greater Vancouver $456,941 (11.4%)
Burnaby $443,745 (13.9%)
Coquitlam $408,207 (7.5%)
South Delta $428,808 (13.1%)
Maple Ridge & Pitt Meadows $309,716 (8.5%)
North Vancouver $577,900 (8.6%)
Port Coquitlam $380,223 (6.3%)
Port Moody $407,563 (9%)
Richmond $447,778 (14.7%)
Vancouver East $494,838 (11.7%)
Vancouver West $697,441 (13.3%)

APARTMENT BENCHMARK PRICES

Greater Vancouver $377,579 (14.5%)
Burnaby $335,018 (14.7%)
Coquitlam $296,207 (16.4%)
South Delta $344,397 (17.4%)
Maple Ridge & Pitt Meadows $253,529 (6.1%)
New Westminster $293,140 (14.4%)
North Vancouver $397,423 (15%)
Port Coquitlam $251,982 (14.1%)
Port Moody $300,816 (12.6%)
Richmond $307,608 (12.5%)
Vancouver East $318,659 (18.8%)
Vancouver West $480,453 (13.7%)
West Vancouver $630,541 (17.1%)