Decreasing affordability and falling consumer confidence across Greater Vancouver are expected to contribute to cooling home prices in 2017, according to a Royal LePage forecast released January 12.
Prices started to moderate in 2016’s fourth quarter, and this year they are expected to drop 8.5 per cent, in part due to new federal and provincial regulations introduced in 2016.
“It is expected that Greater Vancouver will experience a near double-digit correction in the new year, as sanity returns to the marketplace, causing the region to give back much of the appreciation witnessed in the first half of 2016,” said Royal LePage Sterling Realty general manager Randy Ryalls.
“However, inventory will continue to be the story in the new year, as any movement within the market will be exaggerated at their current extremely low levels, meaning that if sentiment remains unchanged, conditions could worsen and prices may fall even further.”
As prices moderated across the region in Q4 2016, the single-detached and attached home segments both flipped from seller’s to buyer’s markets.
“After appreciating at an unsustainable rate for the better part of the year, prices across Greater Vancouver have begun to correct as a result of deteriorating affordability, a lack of quality inventory and heightened market uncertainty stemming from conflicting governmental intervention,” Ryalls said.
“This has led to a decrease in competition for listings across Greater Vancouver, giving rise to new market conditions where prospective homeowners have more power at the bargaining table, causing prices to soften.”
Condos bucked the trend in 2016’s fourth quarter, and this segment remains in a seller’s market. Sales prices for this home type are not expected to cool as much as the other two categories in 2017.
As of the end of 2016, aggregate home prices across Greater Vancouver differed by region, according to Royal LePage data, as follows:
- Vancouver: $1,506,498, an increase of 25.6 per cent year-over-year;
- West Vancouver: $3,573,148, up 32.8 per cent in the year;
- North Vancouver: $1,391,197, up 28 per cent;
- Richmond: $1,102,456, up 27.6 per cent;
- Burnaby: $1,030,282, up 19.3 per cent;
- Coquitlam: $1,003,650, up 27.1 per cent;
- Surrey: $765,726, up 22 per cent; and
- Langley: $786,720, up 25.7 per cent.
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