Re/Max Housing Evolution Report concludes that Metro Vancouver prices rose 128 per cent over decade, from $296,000 in 2000 to $676,000 in 2010
The calibre of Metro Vancouver’s existing housing stock is a big reason average home prices soared 128 per cent from 2000 to 2010, from $296,000 to $676,000, according to a Re/Max report released Monday.
“While supply and demand, population growth and rising foreign investment, have been the main underpinnings behind exceptional gains, revitalization — amid an aging housing stock — and new(er) construction are largely underestimated factors propping up housing values in Canada’s real estate hot spot,” the real estate company’s Housing Evolution Report concluded.
“Just over one-quarter of Vancouver’s owned housing stock was constructed prior to 1970, while 44 per cent was built before 1980.
“With a significant proportion of older homes, renovation spending has been on the rise throughout the past decade — in tandem with home sales — as owners, vendors and purchasers breathe new life into Vancouver’s existing housing.”
Infill housing also boosted values as smaller homes on valuable lots were torn down to build large, upper-end homes.
The report cited the region’s building boom, with a strong focus on condo construction and small-lot subdivisions.
“The upswing is captured by the total value of residential building permits over the past decade — at $35 billion. Permit values climbed consistently from 2001 – 2007, cresting in 2007, before sliding back during the 2008/2009 recession. Yet, the subsequent rebound was quite impressive, as the value of building permits nearly doubled against year-ago levels in 2010, as builders got back to business.”
Condos now represent one in every two sales, with an average price of $457,887.
“Condominiums are undeniably the biggest game changer for real estate over the past decade, especially in British Columbia and Alberta, where they comprise 25 to 50 per cent of residential sales,” noted Elton Ash, regional executive vice-president, Re/Max of Western Canada.
Prices are continuing to rise and will continue doing so, the report added.
“Average price in Greater Vancouver currently hovers at $791,332 — up 18 per cent year-to-date — and is expected to continue its ascent in the months ahead.”
Over 26,000 homes have sold so far this year, an increase of nine per cent.
Three B.C. urban areas were addressed in the Re/Max report, which concluded that Kelowna saw the greatest average price increase over the decade, rising 156 per cent from $188,000 in 2010 to $481,000 in 2010, with new construction the biggest factor.
However, today’s average Kelowna price has dropped slightly to $475,250. “The market remains off peak levels, but confidence is slowly returning, and listings are starting to decline.”
For Victoria, the average price climbed 123.5 per cent from $225,731 to $504,561.
Nationally, the value of a Canadian home has risen 106 per cent since 2000, from $163,951 to $339,030 in 2010, with 10 of the 16 urban markets surveyed experiencing increases of more than 100 per cent. The highest was Regina (173 per cent) and the lowest, London-St. Thomas (68 per cent).
The report said that the value of residential building permits issued nationally in the 10 years was $340 billion, while $450 billion was spent on renovations.