Metro Vancouver house prices will increase by an average of 4.4 per cent this year to $801,000, according to the latest Royal LePage house price survey.
But Vancouver real estate experts suggested Thursday the forecast might be slightly optimistic.
“I’m expecting price increases in the one-to-two-per-cent range,” B.C. Real Estate Association chief economist Cameron Muir said in an interview. “Market conditions are fairly balanced now, which suggests fairly limited upward pressure on prices.
“I really don’t expect to see sales levels reach the point where prices are going to accelerate in any significant way.”
Sandra Wyant, president of the Real Estate Board of Greater Vancouver, noted most Vancouverarea housing prices increased by about two per cent last year – with the benchmark price for a detached home climbing 2.5 per cent to $927,000 while townhouse prices increased by 1.2 per cent to $456,100. Condominium prices rose by two per cent to $367,800.
“If we have pent-up demand this year, (Royal LePage) may very well be correct,” she said, noting the price-increase forecast is higher than other surveys. “It depends on how buyers are affected by certain events, such as interest rates and job growth.”
Royal LePage said confidence crept back into the Vancouver real estate market last year and it expects that momentum to carry over into 2014. The firm predicts total Metro Vancouver housing sales to increase from 28,700 in 2013 to 30,000 this year.
Royal LePage president Phil Soper said the national housing market emerged from a year-long correctional cycle of slow sales volumes last year.
“In the absence of some calamitous event or material increase in mortgage financing costs, we expect this positive momentum to characterize 2014,” he said in a statement.
Soper said talk of a “soft landing” for Canada’s real estate market this year is misguided.
“We expect no landing, no slowdown and no correction in the near-term,” he said. “Conditions are ripe for as strong a market as we saw in the post-recessionary rebound of the last decade.”
Muir noted the value of Metro Vancouver detached homes rose higher than other housing types last year and he expects that trend to continue in 2014.
“Condo prices have been quite flat while the price of single detached homes has accelerated, particularly in some of the tonier markets,” he said. “Eighty per cent of housing starts today are multi-family units so single detached homes will garner an increasing premium over time.”
Muir expects mortgage rates will remain “relatively unchanged” this year, with five-year rates increasing by about half a percentage point by the end of the year.
He said the U.S. economy could pose a risk to that forecast if it grows faster than expected this year, which could fuel inflation concerns and put more upward pressure on interest rates.
Wyant said job growth will play a big role in B.C. real estate values this year, noting the northern B.C. real estate market continues to perform well due to strong employment trends.
The Royal LePage survey said Calgary will have the highest house-price increases in Canada this year, with the average price increasing 5.1 per cent to $461,000. Vancouver’s 4.4-per-cent increase to $801,000 was second while Toronto came in third, with prices there expected to climb by 3.9 per cent this year to $545,000.
Across Canada, the average price is expected to increase by 3.7 per cent to $396,500.
Source: Bruce Constantineau, Vancouver Sun
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