Home sellers in Vancouver will get a boost in 2014 as the city sees an above-average increase in home prices, according to a Royal LePage forecast issued January 9.
Vancouver home prices are predicted to increase 4.4% to an average of $801,000 for all types of homes, compared with a national average of 3.7% ($396,500). The biggest jump will be seen in Calgary, said Royal LePage, with a 5.1% increase to $461,000.
Bill Binnie, broker/owner of Royal LePage North Shore, told Business in Vancouver that the situation in greater Vancouver will move from a buyer's market to one that is more balanced.
"We had a market in 2012-2013 that was favouring buyers in the market, and the lesser sales were a result of changes that CMHC [Canada Mortgage and Housing Corporation] had made in their mortgage availability," he said, referring to reduced amortization periods and increased down payment requirements for investors from 5% to 20%, among other changes.
"We had a situation where not only were there fewer buyers, there were fewer sellers. People were just not putting their properties on the market. There was a lack of confidence in the market for all parties.
"Confidence has now returned and we are seeing a more normal market. It's been pretty normal for the last 4-5 months and I don't see any reason it won't continue into the new year."
This increasing confidence in 2013 was reflected in prices trending upward in all categories. The average price of detached bungalows increased 4% to $1,041,300 while standard two-storey homes saw a 3.3% increase to $1,139,050. The price of condominiums inched up 2.5% to $492,500.
Prices elsewhere in British Columbia did not see Vancouver's growth, with Kelowna having a 1.4% drop in detached bungalows (to $360,000), while condo prices remained stable. Victoria bungalows fell by 2.1% to $460,000, standard two storeys dipped 2.5% to $463,000 and condos were down 3.5% to $249,000.
Overall across Canada, a seller's market will prevail for the first part of 2014. The real estate giant forecasts continuing upward pressure toward the spring, a key time for home sales. Buyers who put off home purchases in 2013's "soft spring" will provide a boost as they choose to buy in 2014.
"A few short months ago, the country's housing market emerged from a year-long correctional cycle of dramatically slowed sales volumes," said Phil Soper, president and chief executive of Royal LePage. "Later 2013 was marked by a transition to buoyant sales volumes and above average price growth.
"In the absence of some calamitous event or material increase in mortgage financing costs, we expect this positive momentum to characterize 2014. In fact, we expect a market tipped decidedly in favour of sellers for the first half of the year, after which we project a shift to a more balanced market."
