While the strata sector is drawing most of the attention in Metro Vancouver, Surrey-Delta detached house sales are quietly leading the entire Metro market. In November 353 houses sold in Surrey-Delta.
This is more than all the detached house sales in Vancouver, Richmond and Burnaby combined and four times higher than in North Vancouver. This is a clue to what is happening: score of families are relocating from north of the Fraser to find affordable detached houses in Surrey and Delta. We believe this migration will continue and likely accelerate. When newcomers spread the word about what this region has to offer, more will follow.
Surrey-Delta detached housing sales were up 47.1% in November from the same month last year, which should not be a surprise since the Fraser Valley posted the second-highest November sales in history. There were more detached sales than either condos or townhouses. The detached benchmark prices are very tempting. In November 144 detached houses were newly listed for $900,000 or less and 44 of these were priced under $800,000. Of these, 75% sold as did 54% of the total 657 new listings that were added in November. This is a very balanced market with opportunities for both sellers and buyers.
The benchmark price of a detached house in November ranged from $914,700 in North Delta to $1.46 million in South Surrey/White Rock and there was buyer activity in each of the 7 distinct communities. The most detached house sales were in Central Surrey, where the benchmark price was up 15.9% from a year earlier – the highest increase in the region – to just over $1 million.
Many buyers across Metro Vancouver are migrating to Surrey-Delta because of the great selection of townhouses, which have become amazingly popular.
In November there were 320 new listings for townhouses in this region, compared to double-digit new listings in most major Metro markets. And more are coming. South Surrey- White Rock, for instance, had the highest number of new townhouse starts this year in all of Metro Vancouver, with 525. Surrey has hosted 25% of all the Metro townhouse started this year. Yet the demand is so high that most of them have already been pre-sold.
Sales of townhouses in Surrey-Delta rose by 43.6% in November from the same month last year. The benchmark price ranged from a low of $524,000 (North Surrey) to a high of $756,500 (Ladner). The typical new listing was on the market for about 13 days before it sold. With a sales-to-new-listing ratio of 77% this is clearly a market that favours sellers. But some buyers may disagree. In Central Surrey, for instance, 103 buyers purchased a townhouse for a benchmark of $541,000, a price $250,000 less than the Greater Vancouver benchmark and $120,000 below the Lower Mainland benchmark. Townhouse buyers in Tsawwassen may also note that prices there have risen faster – 26% – in the past year than in any other Metro community.
Townhouse sales have ramped up recently and one reason is that many buyers want to close before new mortgage rules come in January 1. But the mortgage changes are not as problematic as reported – basically it requires qualifying at a 2% higher rate than what is actually available. Borrowers don’t have to pay the higher rate, only qualify for it. The full-time mortgage professional at Faith Wilson Group can explain the changes and how they make affect your personal strategy.
Condominium buyers have been very busy in Surrey-Delta this year. In the past 11 months they purchased 2,099 condo apartments. In November, the typical new condo listing was bought in a median of 8 days, the fastest time in at least six months. This means that about 10 condos have been selling every day this year in Surrey-Delta. That is impressive. In November, condo sales were 46% higher than in November of last year, at 281, even though sales had dipped a bit since October when 358 condos sold. North Surrey, which has seen many new condos built over the past few years, led the November market with 114 sales at a benchmark price of $478,900.
There has been remarkable price appreciation in both Delta and Surrey condominium apartments over the past year. In North Delta, for example, the typical condo owner has seen a 40.7% price rise since last November. In Cloverdale, benchmark values are up 39.4% and Central Surrey has seen a 42.4% increase year-over-year. Price increases have slowed recently, though, ticking over an average of 2% to 3% per month. If this keeps up, local condo prices will be about 30% higher at this time next year. Based on current values, that represents a typical increase of about $100,000.
Many condo buyers, especially first-time buyers and investors, want to close on an apartment before the latest mortgage “stress test” comes in on January 1.
I know that first-timers and investors are likely the most affected by the federal mortgage regulations. It will be harder to qualify, especially for investors. Some young buyers may have a challenge qualifying at a 2% higher mortgage rate. But look at the appreciation figures in Surrey-Delta. Even if you have to stretch your budget or the timing of your purchase, Surrey and Delta represent great communities that offer a superior real estate investment. So don’t rush into a purchase: take your time, find the right property and prepare to reap the rewards.
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