Detached home prices increased 20.7% in the first quarter of 2022
According to the Royal LePage House Price Survey released today, the aggregate price of a home in Greater Vancouver increased 18.2% 1 year-over-year to $1,368,600 in the first quarter of 2022. Broken out by housing type, the median price of a single-family detached home increased 20.7% to $1,870,100, while the median price of a condominium increased 20.4% to $828,400 during the same period.
"While the supply of listings is beginning to increase, it is happening at a very slow pace. Meanwhile, demand has subsided slightly," said Randy Ryalls, general manager, Royal LePage Sterling Realty. "Greater Vancouver remains in a strong seller's market, with many listings being absorbed quickly. These market conditions are self-perpetuating. Lack of supply causes hesitation in sellers who hold off listing their home until they can buy."
In the city of Vancouver, the aggregate price of a home increased 14.6% year-over-year to $1,478,100 in the first quarter of 2022. During the same period, the median price of a single-family detached home increased 21.7% to $2,665,400, while the median price of a condominium increased 7.1% to $835,600. Ryalls noted that there has been a noticeable shift in buyer behaviour recently, as a combination of sustained price increases, rising interest rates and the introduction of the B.C. government's cooling off period legislation is giving would-be buyers some pause.
"The new legislation is causing a lot of uncertainty among industry professionals and consumers. With few details revealed, and no clear indication of how this policy will be implemented or monitored and by whom, it is difficult to predict what impact this will have on the market," added Ryalls. "We believe that with the collaboration of industry leaders, the province would have been able to devise a policy that better serves Canadians during one of the most important decisions of their lives."
Ryalls added that the cooling off period stands to create more of a supply backlog, and that a mandatory pre-offer period allowing buyers time to conduct due diligence would be more beneficial, as suggested by the British Columbia Real Estate Association. Royal LePage is forecasting that the aggregate price of a home in Greater Vancouver will increase 15.0% in the fourth quarter of 2022, compared to the same quarter last year. The previous forecast, released in December, 2021, has been revised upward to reflect the continued strength of the market through the first quarter of the year.
"Entering 2022, we had anticipated a strong first half, and moderating real estate markets thereafter. Call it buyer fatigue or easing demand, these periods of uncomfortably high home price appreciation do run their course. We are seeing the first signs of moderation in some regions, as more inventory is becoming available and competition eases slightly," said Phil Soper, president and CEO of Royal LePage. "The first quarter of the year was so strong, however, that we are bumping up our 2022 outlook. And, home prices will continue to climb in the months ahead as a result of our relentless low supply-high demand imbalance."