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

Vancouver Motorcycle Show underway at Abbotsford’s Tradex

Event runs until 8 p.m. Saturday, and opens one last day tomorrow from 10 a.m. to 5 p.m.

City’s parks still need repairs after windstorm

Repairs still needed in several Abbotsford parks after wind felled trees

Snowball Classic finals set

Mount Vernon, Burnaby South to square off at Abbotsford Senior on Saturday night

Man, 24, charged with nine sexual offences in Abbotsford and Mission

Alleged victim, who he met online, is under the age of 16

Abbotsford parents can no longer opt kids out of class content for personal beliefs

Change comes as part of ‘big overhaul’ of school district’s learning resources policy approved by board

VIDEO: Students in MAGA hats mock Native American at Indigenous Peoples March

Diocese in Kentucky says it is investigating the matter, caught on video by onlookers

CONSUMER REPORT: What to buy each month in 2019 to save money

Resolve to buy all of the things you want and need, but pay less money for them

Want to avoid the speculation tax on your vacant home? Rent it out, Horgan says

Premier John Horgan and Sheila Malcolmson say speculation and vacancy tax addresses homelessness

UPDATE: B.C. woman and boy, 6, found safe, RCMP confirm

Roseanne Supernault says both she and her six-year-old nephew are fine and she has contacted police

PHOTOS: Women’s Marches take to the streets across B.C. and beyond

Women and allies marched worldwide protesting violence against women, calling for equality

VIDEO: Giants wrap southern swing with 6-4 win in Spokane

The Lower Mainland-based hockey team defeated the Chiefs Friday night.

Anxiety in Alaska as endless aftershocks rattle residents

Seismologists expect the temblors to continue for months, although the frequency has lessened

Women’s March returns across the U.S. amid shutdown and controversy

The original march in 2017, the day after President Donald Trump’s inauguration, drew hundreds of thousands of people

Federal Liberals announce former B.C. MLA as new candidate in byelection

Richard Lee will face off against federal NDP leader Jagmeet Singh

Most Read