Vancouver Home-Price Surge Defies Canadian Housing JittersBy
Cost of typical home rises 11% in April from a year earlier
Buyers in ‘fierce’ competition as condos get multiple offers
Ripples from the downward spiral of mortgage lender Home Capital Group Inc. haven’t yet reached Vancouver.
The cost of a benchmark home in the Pacific Coast city surged 11 percent to C$941,100 ($685,233) compared with a year earlier, the Real Estate Board of Greater Vancouver reported Tuesday. Condominiums were the big gainers, climbing 17 percent to C$554,100.
“Demand has been increasing for months and supply is not keeping pace,” Jill Oudil, president of the board, said in a statement. “We’ll likely continue to see prices increase.”
Shares of Toronto-based Home Capital have plummeted 66 percent since April 19, when Ontario’s securities regulator alleged the alternative lender misled investors about false documentation by some brokers. That prompted a run on its deposits and speculation a broader deterioration in Canada’s housing industry may follow.
It’s still too soon to expect any impact on home prices from the embattled lender’s crisis. Vancouver’s market remains buoyant, suggesting earlier policy measures -- including the province’s 15 percent foreign-buyer tax and tighter federal mortgage rules -- have only had a moderate impact on sentiment.
While the number of transactions fell 26 percent from their record-setting pace a year ago, it’s still a seller’s market, Oudil said.
“Home buyers are looking to get into the market and they’re facing fierce competition,” she said. Properties receiving multiple offers is once again “the norm,” she said.