Metro Vancouver home prices could return to peak levels in a year: CMHC

Metro Vancouver home prices could return to peak levels in a year: CMHC

Rebound in market sales activity likely to spark return to price growth, which could be “modest” or significant.

Home sales activity and average sale prices in Metro Vancouver are likely to increase over the next two years, according to a new forecast by Canada Mortgage and Housing Corp. (CMHC) Resale activity on the region’s MLS, which has seen significant year-over-year growth over the past few months, is predicted to continue that streak in 2020 and 2021. This increase in sales and demand for product will push up prices.

Although the housing agency described the expected price rises as “modest,” CMHC said the average price of a home (all property types) in Metro Vancouver in 2020 could potentially reach a record high of $983,000, and over $1 million in 2021. That compares with a forecast average of up to $928,000 in 2019, and average sale prices of $966,866 in 2018 and $934,977 in 2017. However, those predicted prices are at the top end of the forecast range — CMHC said it was also possible that average sale prices would continue to slide slightly over the next two years (see graph below), perhaps even to as low as $883,000 in 2021.

CMHC said that townhomes and condos priced under $700,000 were expected to see the strongest demand over the next two years. “Meanwhile, conditions in the single-detached market are expected to remain soft, particularly in the higher end segment of the market.” The report added, “While inventories of homes for sale are expected to decline slightly as sales increase, a growing number of newly constructed homes coming onto the resale market will help keep market conditions balanced overall through the end of the forecast horizon.”

Responding to the report, Jason Wong, sales and marketing director at Aragon Properties, told Glacier Media, “We are expecting to see upward pressure in pricing in the market, due to projected economic growth and annual population growth, along with the low interest rates. The fundamentals are definitely there to see price growth.”

Metro’s new-home market

On the presale condo market, CMHC predicted, “New condominium apartment developments are expected to see greater presale activity compared with the longer sales periods of recent quarters, which will encourage additional new development; however, pricing will increasingly be a point of differentiation as consumers have more options in a rising inventory environment.”

However, Wong said he believes there is plenty of “room for a lot of new product” before price growth would be affected. “The Lower Mainland needs a lot of new housing. There is a lot of pent-up demand and it would take a lot of product to satisfy that demand. And we have to recognize that these homes are also not built yet.”

Wong added that Aragon had seen strong presales at its recent condo projects in Vancouver, and was confident about launching a new project in New Westminster’s Port Royal in spring 2020.

B.C. and national picture

Across B.C., the resale market forecast was a similar story to that of Metro Vancouver, with sales and price growth expected in 2020 and 2021 after a weak 2018 and 2019.

The federal housing agency reported, “British Columbia will see modest recovery in price growth in 2020 from a decline in 2019, but rise to the second-highest rate of price growth, after Ontario, in 2021.”

This prediction echoes that of the B.C. Real Estate Association, which forecast recently that home sales would increase in every B.C. region over the next year.

The CMHC’s national forecast was also similar, albeit at lower average price levels. Bob Dugan, CMHC’s chief economist, said, “Housing starts [across Canada] are projected to stabilize in 2020 and 2021 at levels in line with long-run averages. This follows two years of declines from elevated levels in 2017. Resale activity and house prices are expected to fully recover from recent declines, supported by growth in income and population.”

The national average home sale price was $511,830 in 2017, and CMHC predicts it will be approximately $488,000 this year. CHMC said the average sale price could be between $539,800 and $569,600 in 2021.

The agency’s Canada-wide forecast report added, “The current outlook for renewed growth in home prices over the forecast horizon does not imply that overvaluation and/or price acceleration measures will necessarily worsen, since growth in fundamentals over the same time period can be sufficient to support stronger resale market activity and price growth.”

Provided by: Joannah Connolly / Glacier Media Real Estate

Simon Fraser
Market Update

Simon Fraser Condos

Altaire by Polygon

Altaire built in 2008/2009 reaches higher then any other condo building in Metro Vancouver offering panoramic views.

Novo I by Intergulf

Novo I built in 2007 known for the amazing sight lines and views from most units and balconies up to 1000 sq ft.

Novo II by Intergulf

Novo II built in 2007 known for the amazing sight lines and views from most units and balconies up to 1000 sq ft.

Aurora by Polygon

Aurora built in 2006 with 103 condos featuring 36 unique floor plans ranging from 715 sq ft to 1500 sq ft.

One University by Millennium

One University built in 2005 is UniverCity's flagship building with luxury homes featuring semi private elevators.

Harmony by Polygon

Harmony built in 2005 was the first condo development at Univercity & as a result offers a unique setting & views.

Serenity Townhomes by Polygon

Serenity is a collection of 2 bedroom townhomes of 1100 sq ft ranging to 4 bedroom 2000+ sq ft townhomes.

The Hub by Liberty Homes

The Hub built in 2009 is set atop Nester's Grocery and steps from High Street giving these homes an urban feel.

Verdant by VanCity Enterprises

Verdant is a two storey town home building built with environmental design and stylish living spaces which complement the modern exterior of these SFU homes.

Origin by Porte Development

Origin is designed by GBL Architect & BYU Interior Designs, developed by Porte Development Corp. and marketed by Red Dot Real Estate.

Nest by Mosaic

Located on UniverCity High Street across from the new University Highlands elementary schools this refreshing building will add further depth to a growing community.

Highland House by Liberty Homes

A 12-storey concrete high-rise development and targeted towards Rental Investors and First-Time Condo Buyers.

Lift by Porte Development

Lift will be a wood frame building comprising of 56 homes. Building technologies, environmental features, and price points should be similar to Origin.

Altitude by Hungerford Group

Altitude will be a 2 tower development comprising of a 12 and 14 story building with a total of 210 strata units.

CentreBlock by Liberty Homes

CentreBlock at UniverCity atop Burnaby Mountain is the latest condo project with sales commencing early 2014. .

The data relating to real estate on this website comes in part from the MLS® Reciprocity program of either the Real Estate Board of Greater Vancouver (REBGV), the Fraser Valley Real Estate Board (FVREB) or the Chilliwack and District Real Estate Board (CADREB). Real estate listings held by participating real estate firms are marked with the MLS® logo and detailed information about the listing includes the name of the listing agent. This representation is based in whole or part on data generated by either the REBGV, the FVREB or the CADREB which assumes no responsibility for its accuracy. The materials contained on this page may not be reproduced without the express written consent of either the REBGV, the FVREB or the CADREB.