Vancouver house prices still a shocker

Thursday, January 31st, 2019

Vancouver home prices up and down over the years

Brent Jang
The Globe and Mail

Globe and Mail

Updated April 7, 2018 Reprinted January 31, 2019


If you’re fortunate to have a decent job today in Vancouver and had the foresight to buy a home in the mid-1980s, before real estate prices soared, then life looks pretty fine these days in Lotus Land.

The broader B.C. economy has been severely bruised over the past three years, but in Canada’s third-largest metropolitan area, residential home prices have held up relatively well.

The mild climate, the gorgeous mountain setting of Vancouver and the relaxed West Coast lifestyle are strong selling points. So, despite the reams of disappointing economic data for British Columbia as a whole, Vancouver has managed to escape some of the pain that’s most keenly felt in rural areas.

It’s prudent to have a buyer-beware attitude whenever the real estate industry goes on its sales pitch to urge potential buyers to act soon before prices go through the roof. Nevertheless, in Vancouver’s case, those warnings rang true for a long time.

Real estate prices, which surged after the Expo 86 world’s fair in Vancouver, continued to climb through 1994.

However, the market started flattening out in 1995 in some neighbourhoods and dropping slightly in others.

By 1998, house prices fell across the board, defying the forecasts of optimists who thought that Vancouver could somehow be insulated from bad news such as the Asian economic flu that began in late 1997 and lingered through 1998.

Still, the recent slump in the real estate market hasn’t been anything like the early 1980s, when Vancouver got clobbered by the recession and stiff mortgage rates.

On the city’s affluent west side, for instance, the average price of a three-bedroom bungalow plunged 22 per cent to $160,000 in 1982 from $204,000 in 1981, according to data compiled by Royal LePage.

The average price on Vancouver’s west side climbed slowly back to $200,000 in 1985 and then rocketed up over the next decade to hit $520,000 in 1995. Prices this year are hovering around $490,000, down an average of 6 per cent from five years ago.

The suburbs have weathered the economic storm reasonably well. Average prices in Burnaby — which is the closest Vancouver suburb on the SkyTrain commuter system — have dipped 12 per cent over the past five years to $265,000.

It’s difficult to generalize in Greater Vancouver, since some sellers in certain neighbourhoods have fetched roughly 15 per cent less than they would have in 1995, while others have seen their house values rise somewhat.

Joy Chao, a real estate agent with Dexter Associates Realty’s office in Vancouver’s upscale Kerrisdale district, figures that buyers won’t face a huge downdraft in the short term. Longer term, there could be some capital appreciation since Vancouver’s property is hemmed in by the ocean and mountains.

East of Vancouver there’s the picturesque Fraser Valley, but to actually live in Vancouver, well, there’s only so much land.

That bit of geographical reality means that home shoppers waiting for the market to crash from current levels won’t get their wish, unless 20-per-cent mortgage rates again raise their ugly head.

Hong Kong buyers are much less of a force today in the Vancouver market than in the years prior to the handover of the former British colony to China in 1997.

But Ms. Chao, 31, has found that her Mandarin language skills have come in handy with buyers from Taiwan, although they’re arriving in much smaller numbers than the influx during the late 1980s and early 1990s from Hong Kong, where Cantonese is the dominant language.

Another change compared with a decade ago is that there are fewer buyers from the rest of Canada because baby boomers from Alberta and Ontario are no longer pouring into Vancouver. However, Ms. Chao said numerous long-time Vancouver residents are taking advantage of the dip in home prices to get into the market.

While it remains to be seen whether the local real estate market has bottomed yet, some listings on Vancouver’s west side look like bargains compared with five years ago.

A fixer-upper on a busy street in Point Grey is listed at $369,000, a starter home in Kitsilano has a price tag of $459,000 and the asking price for a bungalow on a quiet street in Kerrisdale is $739,000.

Many newcomers to Vancouver will undoubtedly get sticker shock from those so-called deals. Even with real estate cooling off, there’s still a steep admission price to become a homeowner in a city where it is possible to live the cliché and go golfing in the morning, sailing in the afternoon and skiing at night

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