Nine detached houses sold for less than $2 million each on the Westside of Vancouver in August, but the biggest news is likely that the erosion in benchmark prices in the prestigious market is apparently winding down. As of August, six of the 18 Westside neighbourhoods we monitor were seeing higher benchmark prices for detached houses, not only from a month earlier but as compared to three months earlier, an indication that a trend is developing. The big gainer in price was South Cambie, with benchmark prices up 3.5% from May at $3.09 million. In all, the benchmark detached house price on the Westside was $2.88 million in August, down just 0.5% from July and off 1.6% from three months ago.
A buyer might as well purchase an Eastside detached when one looks at all the options available in the Metro Vancouver residential market. If one considers potential appreciation, the flexibility provided by a detached house on a plot of land, the rental potential from a suite or a laneway house which is more widely allowed in Vancouver than anywhere else, the lack of strata fees and the simple cache of owning land and a house in the most desirable city in Canada, it looks quite tempting. And the numbers can make sense. For example, in August 4 buyers purchased a detached house in the Renfrew area – which has SkyTrain service – for a benchmark price of $1.2 million each, which is just slightly higher than the benchmark price of a townhouse on the Westside of the city. Say one of these Renfrew houses was a three-bedroom with a secondary suite that rents, based on Vancouver average one-bedroom rental rates, at $1,600 per month. With a 20 per cent down payment and being able to qualify under the mortgage stress test, it is possible to arrange five-year mortgage financing today at 2.87% (available even at major banks). The resulting mortgage payments, minus the rental income, could be lower than the cost of renting or buying a three-bedroom condominium or townhouse in most of Vancouver. As well, historically, Vancouver houses have appreciated in value higher and faster than strata units. Even after the downturn over the past two years, Eastside houses are still worth 50% more than they were five years ago.
Vancouver’s condominium apartment market began settling into a more balanced state in August, with 53% of the 601 new listings selling and the benchmark price stabilizing in 21 of the 33 individual neighbourhoods we monitor. In each of these the August benchmark price was higher than in the previous month. In all, the benchmark condo price on the Westside was $756,000. up 0.4% from July; while it was up 0.3% on the Eastside from a month earlier, at $552,300. The 319 buyers in August were active in nearly every neighbourhood and through a wide price range. Sixteen condos sold for less than $400,000, for instance, and 14 sold for more than $1.5 million.
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