The unprecedented increase in Abbotsford house prices accelerated again in May, with a typical single-family home topping the $600,000 mark.
But Mayor Henry Braun isn’t on board with suggestions that government intervene to try to quell the market.
Vancouver Mayor Gregor Robertson has warned that sky-high house prices threaten the local economy and called for senior levels of government to step in.
But Braun said the negatives of such action could outweigh the benefits.
“I’m always mindful of unintended consequences when government gets enmeshed in the free market.”
He suggested that any action that depresses home values could leave new buyers with mortgages that exceed the value of their houses. Braun said the city hopes to encourage developers to increase the supply of housing by promoting more density in the new official community plan. But while there has been a substantial uptick in new construction, Braun said it may take developers “a year or two” to catch up.
In the meantime, he foresees prices continuing to rise.
Over the course of a single month, the benchmark price of a detached home in Abbotsford rose an astounding 7.1 per cent – or $40,000 – to $614,900, according to the Fraser Valley Real Estate Board (FVREB).
Only four months ago, that home price passed the $500,000 mark, and over the past year, the benchmark price has risen 32 per cent – or $140,000.
The increased prices are fueled by strong demand, with sales across the Fraser region at record levels and nearly 50 per cent above last year’s level.
The FVREB said it took an average of just 16 days to sell a house in May.
Tales abound now about bidding wars for homes are driving prices well above asking. Multiple sources have said many winning offers now include no subjects or conditions attached to purchase – including pre-sale home inspections.
Townhouse and apartment sales have also risen significantly, although they have failed to keep pace with house prices.
For townhouses, it’s less clear how prices have been affected. While the benchmark price for a “typical” townhouse has risen just nine per cent over the last year, median prices have jumped more than 30 per cent, suggesting that newer, more expensive townhouses make up the majority of sales.
Apartment values are simpler, with the year-over-year benchmark price increase of 14.2 per cent in line with other measures.
The MLS home price index for the region, which measures the relative values of single-family homes, townhouses and apartments against one another, shows that the gap between the prices of a detached home and attached homes has never been greater in the last decade.