The market for luxury homes, like this one in Vancouver, is expected to stay strong despite fewer sales. (Point2Point Homes)

Luxury buyers in Greater Vancouver stray from houses, aim for condos: report

Prices for condos are expected to continue to rise

Sales are down, but prices remain high for luxury homes in the Greater Vancouver area, according to a Royal LePage report released Thursday.

The median price of a luxury detached home in the region rose by 5.2 per cent to $5.8 million in the first quarter, compared to the same time last year, while luxury condos increased by seven per cent to $2.5 million.

Sales of detached luxury homes dropped by nearly 40 per cent, however, while luxury condos saw a 27-per-cent drop.

READ MORE: Growth in Lower Mainland home prices slows in April

Prices are expected to slow down for the rest of 2018, Royal LePage CEO Phil Soper said, as the effects of the new mortgage “stress test” and provincial policies like the speculation tax continue to be felt.

The stress test means that all borrowers must now qualify for a mortgage based on either the five-year benchmark rate or their lender’s actual rate plus two per cent, whichever is higher. The change will apply to all mortgages, new or renewed, even if the down payment exceeds 20 per cent.

The speculation tax, which comes into effect this fall, will hit all homeowners in B.C.’s urban areas who don’t pay income tax in the province. It will start at 0.5 per cent of the property value before rising to two per cent next year, and excludes rural cottages and cabins.

“The price appreciation that we are witnessing in Greater Vancouver’s luxury market this spring is largely a result of momentum being carried over from 2017,” said Soper.

“Price appreciation in the luxury market is expected to decline in 2018, while sales volumes are expected to continue to be lower than recent norms.”

READ MORE: David Eby cancels town hall due to ‘safety concerns’ after school tax protest planned

By 2019, detached luxury homes are expected to drop in value by three per cent, while luxury condos are expected to rise by two per cent.

“Younger luxury buyers prefer condos for their affordability and little upkeep, while baby boomers increasingly prefer them as a downsizing option,” Royal LePage Sussex sales representative Brock Smeaton said.

“Of course, this demand also catches the eye of investors who see rental opportunities.”


@katslepian

katya.slepian@bpdigital.ca

Like us on Facebook and follow us on Twitter.

Just Posted

Crews respond to fire in detached garage on Maple Avenue in Chilliwack

Firefighters had to access the small fire via neighbouring property on Woodbine Street

Chilliwack Chiefs chosen to play in CJHL Prospects Game

Harrison Blaisdell and Kevin Wall are among 11 BCHL stars selected to play in the showcase game.

Chilliwack soccer star Jordyn Huitema coming home for the holidays

After a crazy-good year with the Canadian national soccer program, the teenager deserves a break.

Chilliwack jury acquits man of choking, violent sexual assaults of girlfriends

Michael Sean Myers found guilty of criminal harassment and uttering threats in BC Supreme Court

Chilliwack school kids draw ‘don’t drink and drive’ messages on liquor store bags

Children from six elementary schools decorate bags as part of promotion created by local Mountie

Story of the Year: Deadly Humboldt Broncos bus crash

The Canadian Press annual survey of newsrooms across the country saw 53 out of 129 editors cast their votes for the Humboldt Broncos bus crash.

Surrey boy’s birthday wish raises $13,500 for rescued farm animals

Matthew Farden received a large donation from the mister Blake Foundation towards a sanctuary farm.

Trial date postponed for man charged with killing Abbotsford police officer

Oscar Arfmann’s trial pushed back from January to May 2019

Privacy watchdog says legal cannabis buyers should use cash, not credit

Some countries could bar entry to individuals if they know they have purchased cannabis

Emergency task force calls for safe supply of drugs in Vancouver to prevent ODs

Dr. Patricia Daly says more people are dying alone in the city than elsewhere in the province

‘A start:’ Alberta critical of Ottawa’s $1.6B package for ailing energy sector

A further $150 million is to be used for clean growth and infrastructure projects

New B.C. Lions coach DeVone Claybrooks adds eight to coaching staff

DeVone Claybrooks has filled out his staff for the 2019 season

Two-year-old attacked by cougar near Mission, B.C.

Boy not seriously injured in incident on Monday afternoon

Road to the World Juniors leads through B.C.

Finland plays Denmark on Wednesday, United States takes on Czech Republic on Saturday

Most Read