Fraser Valley & Metro Vancouver l 2015 Real Estate Market Update

(February 03, 2015 )

As our clients and news letter subscribers are aware, THE BC HOME HUNTER GROUP REAL ESTATE TEAM forecast the Vancouver region’s housing market would have an outstanding 2015. 

Those predictions are spot on amid forecasts that Alberta’s oil and gas pain will be British Columbia’s gain.The home price index (HPI) in Greater Vancouver for single-family detached homes hit a record $1,010,000 in January, jumping 8.4 per cent from the same month in 2014. 

The benchmark HPI, which strips out the most expensive properties, reached a new high of $641,600 last month for detached homes, condos and townhouses sold on the multiple listing service, up 5.5 per cent over the past year.There were 1,913 existing properties that traded hands last month, up 8.7 per cent from January, 2014, and 14.9 per cent above the 10-year average for January sales volume, the Real Estate Board of Greater Vancouver said Tuesday.

More B.C. residents moved to Alberta than the other way around from 2011 to 2013, but the trend began reversing in the third quarter of last year as the B.C. economy stayed steady. Lower oil prices began hurting Alberta in the second half of 2014. 

Our real estate sales team toured Kitimat, Fort St. John, Prince Rupert and Fort Nelson in late 2014 allowing our team to have "boots on the ground" humtel as to the exact state of those cities and regions resourse driven real estate markets and economies. We also know the Calgary and Alberta real estate markets excpetionaly well. All of which allows our team members to speak with absolute authority to our clients and to have a highly evolved forecasted model.

While international migration to B.C. has been strong since the post 1986 Expo and 1990s, the province saw net losses of residents to other parts of Canada in 2012 and 2013, according to BC Stats.

In the third quarter of 2014, B.C. reaped a net gain of 640 residents from Alberta.

Most people who move to B.C. end up settling in Greater Vancouver and the increasingly ultra desirable Fraser Valley. Many proponents of liquefied natural gas exports have opened offices in downtown Vancouver, and if even one or two major LNG projects launch, northwest B.C. will also be attracting a good portion of workers from Alberta’s oil patch. Regardless what the enviro extremists and their supporters attempt to do, British Columbia and any province needs the energy sector and any other industry investments and well paid jobs.

Jock Finlayson, executive vice-president of the Business Council of British Columbia, predicts that a continued influx of immigrants from overseas and low interest rates will be key drivers behind the Vancouver area’s housing market this year, with interprovincial migration providing an extra boost to population growth. Most didn't believe our real estate team when we forecast another drop in interest rates but our clients are now benefiting from that knowledge in significant ways. 

The lower loonie will of course make Vancouver more attractive for buyers from countries such as China and the United States. Regions such as the Okanagan should also see growth and benefits.

British Columbia posted a net gain of more than 37,000 people from other countries and nearly 7,500 residents from other provinces in the first nine months of 2014, according to preliminary data. The number of newcomers to B.C. in those first nine months has already exceeded original forecasts for the full 12 months of 2014.

Mr. Finlayson said that given the robust housing demand, the market will stay healthy this year in Metro Vancouver, especially for detached properties, but the question is: How high will prices go? “We’re pushing at the outer limits of conceivable pricing,” he said.

Detached homes on Vancouver’s west side hit a record HPI of $2,351,300 in January, up 9.6 per cent year-over-year, while the detached price on the city’s east side swelled 12.2 per cent to a new high of $974,500.

Hani Lammam, executive vice-president at Cressey Development Group, said housing affordability needs to be viewed in the context of a much wider area than Vancouver’s west side.

Many newcomers to Vancouver experience sticker shock, so they should broaden their search beyond detached homes and instead consider condos and townhouses in the city and the suburbs, he said.

“The affordability issue is front and centre,” Mr. Lammam said. “People tend to think of the west side of Vancouver, but when you look at the region as a whole, there are alternatives.” For instance, the HPI for a condo in Coquitlam reached $264,900 last month, up 2.5 per cent from January, 2014.

In the incredibly desirable Fraser Valley, which includes the sprawling and less expensive Vancouver suburb of Surrey, there were 853 residential sales in January on the multiple listing service, up 10.5 per cent from 772 properties sold in the same month last year. With South Surrey and White Rock carrying the lions share of most valuable Fraser Valley homes it is rapidly becoming the Fraser Valley's version of West Vancouver.

January’s HPI for Fraser Valley detached homes climbed to $571,700, up 3.5 per cent year-over-year. Our team has seen significant growth in the previously under served townhouse market. Townhouses are to the Fraser Valley much like condo's are to Metro Vancouver. However while the North Vancouver condo market for example, is soft, the Fraser Valley townhouse market is excellent.

The real-estate industry argues that the HPI provides a better barometer of the housing market. Adding in the high-end sales, the average price for detached properties sold was $659,522 in the Fraser Valley and $1,303,256 in Greater Vancouver. 

It comes as no surprise that our progressive, urban and suburban real estate team at THE BC HOME HUNTER GROUP, see things a little differently.

Call or email our team any time with your questions, 604-767-6736. We really do make coming home a breath of fresh air.

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