VANCOUVER (NEWS 1130) – Rising prices and dropping sales have prompted more speculation about what’s in store for Greater Vancouver real estate.
The BC Real Estate Association is predicting prices will climb nearly two per cent this year, but UBC Sauder School of Business professor Tom Davidoff says that might change next year.
“Single family is quite weak, particularly at the higher end. We’ve seen actual reduction in what homes are worth,” Davidoff says.
“We haven’t seen that kind of weakness in condo yet. There’s a possibility of a significant correction there, as well. A weakening of ‘incredibly strong’ is not yet to weak, so you’re starting from a very, very strong point. I don’t think the sales-to-listing ratios for apartments have even hit buyers’ market yet.”
He says while condo sales are still stronger than single family homes, a “significant correction” is possible.
“Apartments have gone from very hot to a sort of balanced market situation, so good time to be a buyer,” says Davidoff, adding that, conversely, it could be a frightening time for sellers because of increased financial stress tests and high apartment prices and inventory. “A lot of the people who wanted to buy already have bought, so that’ll be very interesting to watch.”
Jason Turcotte with Cressey Developments says their latest condo tower near Queen Elizabeth Park is already more than 80 per cent sold, but he agrees changes are on the horizon.
“It’s very challenging to produce housing right now. I mean, the marketplace is showing some signs of cooling, but the cost side of the equation certainly hasn’t,” Turcotte says.
He adds not all properties are created equal.
“We have to price appropriately to the market of the day and it is changing right now,” Turcotte says. “But I think, where you can demonstrate that the value is there, that the marketplace responds very well and not taking for granted that it’s just going to be this robust market that will buy it no matter what.”
He says investments are still being made where buyers see good price and quality.
“We are still seeing some investment-oriented purchasers on some of the smaller homes because we did have a mix of homes from one-bedrooms all the way up to more than two thousand sq-foot, two and three-bedroom homes, so a real broad mix.”
Prices for the Chelsea project on Cambie Street and West 31st Avenue, which is slated to break ground this fall, range from $650,000 for a studio to almost $3 million for larger suites.