Single-family homes still winners in property price race
Single-family homes have been the winners over the long term while apartments have been struggling, an analysis of Metro Vancouver real estate statistics released last week shows.
B.C. Assessment released 2013 assessments on Wednesday, while the region's real estate boards released December and year-end information on Thursday.
"The resource that is scarce is land," said Tsur Somerville, director of the centre for urban economics and real estate, Sauder School of Business at the University of B.C. "You can always build more condominiums, but if you want a backyard, there's a limited space."
He said that isn't likely to change soon, despite the large cohort of baby boomers who could choose to downsize in the near future.
"Most people stay in their houses longer than you expect," Somerville said. "They want space for the grandkids."
Cameron Muir, B.C. Real Estate Association chief economist, said 80 per cent of the housing starts in Metro Vancouver are now for multi-family homes, so the stock of single-family homes is becoming a smaller and smaller portion of the market, thus earning an increasing premium.
"Since the end of 2009, the apartment and townhouse market has been essentially flat in terms of pricing," Muir said. "Real elevation has come in the single-detached side."
Over the past five years, single-family homes were the big winners, particularly in Burnaby, Vancouver and Richmond, where the five-year gains are still more than 20 per cent.
However, this year, for the first time in many years, a number of homeowners in some areas of B.C. will see a drop in their property assessments. In tony areas like Whistler and Vancouver's west side, assessments fell, while more affordable areas like Surrey or the Tri-Cities, held their own.
On Thursday, the Greater Vancouver and Fraser Valley real estate boards' reports showed that both buyers and sellers are holding off, waiting to see which direction prices will head. Both sales numbers and properties for sale are down, the numbers show.
The real estate boards' reports provide information on the benchmark price of homes in each Lower Mainland community, and price performance in both the short and long term. Benchmark prices are the estimated sale of a typical property within a market. The data is divided into 85 categories, including 30 areas divided into single-family homes, apartments and townhouses. Some communities do not have housing in all three categories.
For example, comparing the benchmark price in December 2012 to December 2011, apartments in Whistler, South Surrey/White Rock and townhouses in North Surrey all saw their benchmark prices drop more than nine per cent. But not all apartments and townhouses were on the wrong side of the real estate equation: The biggest growth in benchmark prices was in townhouses in Whistler and Squamish and apartments in Pitt Meadows and North Surrey. For single-family homes, the benchmark price has not moved up or down by more than 6.5 per cent in any region, the data shows.
For more immediate trends, an analysis of the one-month change in benchmark price shows a drop of about four per cent in the prices of townhouses in South Surrey/White Rock and North Surrey and houses on the Sunshine Coast between November 2012 and December 2012. At the other end of the spectrum, there was an uptick of 5.8 per cent in the benchmark price of an apartment in North Burnaby between November and December, and one of 3.7 per cent on the benchmark price of an apartment in Pitt Meadows.
Year-over-year, 30 categories showed gains in benchmark price, while 58 categories showed losses. The five-year change, which compares benchmark prices from January 1, 2008, before the housing crash in the U.S., is negative in 43 categories. Those include apartments in 24 of 30 areas, townhouses in 12 of 30 areas and single-family homes in seven of 30 areas. The slide ranges from 39.1 per cent over five years for an apartment in Whistler to 0.5 per cent for an apartment in Tsawwassen.
Apartments in the city of Vancouver, in Burnaby South and in Ladner were the only dwellings to show gains in benchmark prices over the past five years, while townhouses showed gains in most areas over that period.