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

‘Why not Abbotsford’: Mayor working to see pro hockey return to city

Henry Braun says he has tried continuously to bring a team back to the Abbotsford Centre

Man airlifted to hospital following mushroom farm stabbing

Abbotsford Police speaking with two men from the scene

Abbotsford man faces charges in Delta hit and run

Five men were injured in the June 2017 incident in Ladner

Motorcyclist slides under dump truck

Bike operator lucky to survive collision at Aldergrove intersection

Three new exhibits to open at The Reach Gallery Museum Abbotsford

Opening reception with the artists on Thursday, May 24

ACS Knights, MEI Eagles win big at FV Track Championships

Abbotsford athletes excel at last week’s event, look ahead to provincials later this month

Study recommends jurors receive more financial and psychological support

Federal justice committee calls for 11 policy changes to mitigate juror stress

Surrey RCMP issue warning after third sexual assault since Sunday

It is the third sexual assault reported this week in Surrey

Research needed on impact of microplastics on B.C. shellfish industry: study

SFU’s department of biological sciences recommends deeper look into shellfish ingesting microbeads

B.C. dad pens letter urging overhaul of youth health laws after son’s fatal overdose

The Infants Act currently states children under 19 years old may consent to medical treatment on own

Singh sides with B.C. in hornet’s nest of pipeline politics for the NDP

Singh had called for a more thorough environmental review process on the proposal

VIDEO: Campers leave big mess at rural Vancouver Island campsite

Vehicle parts, garbage, a mattress, lawn chairs, beer cans, and even fecal matter left in the area

VIDEO: B.C. woman gets up-close view of Royal wedding

Kelly Samra won a trip back to her home country to see Prince Harry and Meghan Markle say ‘I do’

30 C in B.C., 30 cm of snow expected for eastern Canada

It might be hot in B.C., but the rest of Canada still dealing with cold

Most Read