It’s becoming more accessible for people to purchase homes in Vancouver, but only if they have more than 1 million dollars to spend. The Canada Mortgage and Housing Corporation (CMHC) just released its quarterly housing marketing assessment, and market analyst Keith Stewart explained that in the past, demand for high-end homes drove price increases in the housing market.
“For sure that was the case following the financial crisis,” he told StarMetro.
However, that’s no longer the case. Now homes priced up to (but not topping) $1 million are leading price increases. By the end of March 2018, the number of homes in Metro Vancouver priced above $1 million greatly outpaced the number of those that were sold in that price range. The opposite was the case for homes under that price.
Home buyers who had less money to spend faced fiercer competition in the housing market. One couple told StarMetro they had a $500,000 budget but were doubtful they could find a home in the city or even broader Metro Vancouver.
Homeowners selling properties for less than $1 million in the area are likely to receive multiple offers and be involved in bidding wars. It’s a big change from four years ago, where just 14 percent of homes were priced above $1 million. Now it’s 45 percent.
Stewart said the reason for the increase is due to many factors, including the federal government stress test and B.C.’s 2016 property transfer tax on foreign nationals.
As for other areas of the country, CMHC found that in Toronto, prices for single-detached homes dropped in the fourth quarter of 2017, but prices for condominiums had “stronger price gains.”
In Victoria, “house prices remained elevated over local incomes” while in Montreal “the growth rate of house prices has increased.” CMHC also noted that there’s strong evidence of overbuilding in Calgary, Edmonton, Saskatoon and Regina.
“Our market assessment continues to show a high degree of vulnerability at the overall national level due to moderate levels of price acceleration and overvaluation existing together,” explained Bob Dugan, Chief Economist in a statement. “Regionally, there’s a fair amount of variation, as we continue to see a high degree of vulnerability in major centres in Ontario and British Columbia while Prairie and Atlantic markets range from moderate to low.”
