Increasing inventories helps take pressure off
Derrick Penner
Sun
Metro Vancouver and the Fraser Valley saw more residential real estate sales in April than they did one year earlier.
April was a continuation of the trend that has seen sales ease off in Lower Mainland real estate markets and listings rise, which has taken a lot of the pressure off property prices, one economist said Tuesday.
Both the Real Estate Board of Greater Vancouver and Fraser Valley Real Estate Board released April sales figures Tuesday showing higher sales than a year ago when markets were just emerging from their doldrums, but a less frenzied pace of transactions than at the end of 2009.
“What I’ve been watching is a market that has returned to where you would think the market should stand just now coming out of a recession,” said Cameron Muir, chief economist for the British Columbia Real Estate Association.
Muir said those people looking to buy homes as B.C. came out of the recession have largely made their purchases. From here on in, he expects that rising interest rates and stricter mortgage qualifications will crimp the ability of new buyers to get into the market.
The net result, he added, is that prices “will likely face little upward pressure for the balance of the year.”
In Metro Vancouver, the board reported 3,512 home sales through the Multiple Listing Service in April, 18 per cent above the same month a year ago.
At the same time, would-be sellers poured 7,648 new listings onto the market, almost 65 per cent more than were put on the market in April 2009. That brought the region’s total inventory to 15,901 units, up 17 per cent from March and 11 per cent from April 2009.
The region’s benchmark price for a detached home, an average price for typical homes sold, hit $818,403 in April, up 21 per cent from the same month a year ago, and up 2.2 per cent from March.
In the Fraser Valley, realtors recorded 1,793 sales through the Multiple Listing Service, some 39 per cent higher than April 2009.
However, the regional inventory rose to near-record levels with the addition of 3,760 new listings, bringing a total inventory of 10,635 units.
The Valley’s benchmark price for a typical detached home hit $520,423 in April, up 13 per cent from $460,299 a year ago. Compared with March, that price represented a 1.1-per-cent increase.
However, a few price points in both board areas eased off their March highs.
In the Fraser Valley, for instance, the benchmark detached-home price in Langley dropped three per cent from March, to $523,065. The benchmark Abbotsford condominium price slipped 1.3 per cent from March, to $324,480.
Deanna Horn, president of the Fraser Valley board, said the statistics seem to indicate that demand is declining most among higher-priced properties, with strong interest still being shown in the “typical” benchmark range.
“You’ll see incremental price increases and decreases depending on the area and the property type,” Horn said, but on balance the market is “quite stable.”
In Metro Vancouver, the benchmark price for a Burnaby detached home slipped 1.5 per cent to $791,994 compared with March. The benchmark North Vancouver apartment price was down 4.4 per cent from March at $390,383.
However, Muir said not a lot can be read into one month’s figures.
“If listing inventories climb dramatically and sales drop off current levels, of course there is potential for home prices to edge lower,” he said. “But at this point it’s too early to make that kind of call.”
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