Photo: Francois Boucher/Flickr
Condominium prices in Greater Vancouver soared last quarter thanks to stricter mortgage regulations, says Royal LePage.
The median price of a condo rose 20.2 per cent year-over-year to $651,885 in the final quarter of 2017, according to the real estate company’s House Price Survey, published today.
Royal LePage says many prospective homebuyers entered the market last quarter in order to avoid the Canadian government’s new mortgage stress test, which came into effect on January 1, 2018.
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“It is true that the new lending policies may slow errant home purchasing behaviors. However, by diluting prospective homeowner’s purchasing power, these regulations will likely place many purchasers into the entry-level market, causing the [condo] segment to overheat further,” says Randy Ryalls, general manager at Royal LePage Sterling Realty, in a press release.
The quarterly House Price Survey provides housing values on condos, bungalows and two-storey homes in 53 of the nation’s largest real estate markets, based on internal data.
Condos weren’t the only housing type in Greater Vancouver to experience price appreciation last quarter, though the gains in other segments were relatively modest.
The median price of a two-storey home increased 6.6 per cent year-over-year to $1,586,991. Meanwhile, the median price of a bungalow rose by 5.3 per cent to $1,436,606 compared to a year ago.
According to Royal LePage, low inventory levels and growing demand fueled overall home price appreciation across Greater Vancouver last quarter.
As a result, the aggregate home price in Greater Vancouver rose 8.2 per cent year-over-year to $1,267,769 in Q4 2017.
“Home values have continued to strengthen across Greater Vancouver, particularly in the entry-level market where conditions have intensified even further, and competition for available property is stiff,” says Ryalls.
Until the issue of limited inventory is addressed, Ryalls says the region will likely continue to see significant home price growth, even if demand eases.
Going forward, Royal LePage predicts that low inventory levels will continue to impact price appreciation with the aggregate home price increasing by 5.2 per cent by the end of 2018.