Blog

"Metro Vancouver's cheap-mortgage-fuelled real estate market has overshot its previous peak for prices with indications it will keep going, albeit more slowly, before cooling with the rise in interest rates."

Average prices in February in Metro Vancouver excluding Surrey, Langley and White Rock are at $662,741. The previous peak in May 2008 was $624,639. The combination of warmer weather and the influx of visitors from all over the world has had some measurable impact on our local real estate market.

The Teranet-National Bank housing price index analyses on the repeat sales of homes shows a that the deflation during our recent recession had all but been regained by January. This trend while expected to continue will most likely go more slowly. They found January was the ninth month in a row in which the national price index increased.

"Even in Vancouver, we've gained back everything we lost," Simon Cote, an analyst at the National Bank of Canada said in an interview. "The pace might be slowing a bit, but they are still going up."

Metro Vancouver prices have seen the following trends:

      1. Reached recession low in May 2009, but rose 11.7% between May and Jan/2010
      2. Prices rose 0.9% between December and January, biggest gain amongst 6 major markets
      3. Increases in supply of both new construction and more resale homes available will tend to balance the market for the long term.

Increased mortgage rates will also contribute to this balance. Canada banks increased their posted 5 year rates by .6 of a percent on Monday/Tuesday to 5.85. "For a family with a household income of $70,000, Muir said, this week's bump in five-year rates for buyers seeking five-year terms reduces the final amount they can pay for a home by $35,000."

Source: The Vancouver Sun