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Detached house sales in North Vancouver were up 15.4% in October from the same month a year earlier, to 75, but remain well below the spring pace when about 130 houses sold each month.
New listings were 13.5% higher, however, and the typical new listing sold within a median of 16 days. Buyers are awakening to restrictive new mortgage regulations coming in January, which will likely spur sales over the final two months of this year.
The benchmark price of a detached house was unchanged in October, at $1.7 million, from three months earlier: in some neighbourhoods house prices are 2% to 3% lower. There is a good selection, with 177 new listings added in October. The time appears right to be buying.
North Vancouver townhouse buyers were cheered in October as new listings increased, rising 31.6% from October 2016 to the highest level since July. Still the 50 townhouses added barely satisfied demand, as 62% of the new listings sold, half of them in less than 8 days. The good news is that more new townhouses are being built: the bad news is that less than 50 began construction so far this year and they will likely pre-sell for higher prices than the current resale benchmark of $977,000. A key reason is land values. Potential townhouse sites along Marine Drive, for instance, are now selling for $475- $522 per square foot, just for the land. When development fees, construction costs, landscaping, financing, marketing and other soft costs are added, per-square-foot prices can more than double. There are also new townhouses coming to the Maplewood area, where more than 150 acres was recently approved for 1,500 condos and townhouses, but it may take years for these to come to market.
In October, 12 of the 13 North Vancouver neighbourhoods we monitor reported townhouse sales, and buyers were also active through a wide prince range, from $550,000 or less (2 sales), to $1.2 million and up (5 sales). Sales were evenly distributed geographically and by price. Lynn Valley, with 5 sales, and Central Lonsdale and Hamilton, each with 4 sales, were the most active. The most popular price point was $1.1 million to $1.2 million, with 10 sales. Across North Vancouver, the sales-to-new-listing ratio was 64%, but this spiked to 100% for listings priced from $850,000 to $950,000. The sales success ratio dipped to 41% for the 28 townhouses newly listed at $1 million or higher. Sellers are advised that North Vancouver buyers remain price conscious. For more than 20 years, Faith Wilson Group has been third-party recognized for our ability to achieve listing prices that lead to quicker sales and higher prices than the industry average. We do this by ascertaining the true market value.
Many people want to move to or continue to live in North Vancouver, naturally, because it is considered a premier community
with outstanding amenities, schools and recreational opportunities. But the combined (all types) home price in October was $1.09 million, up 9.6% from a year ago. This partly explains the huge demand for North Vancouver condominium apartments, which have a benchmark price of $556,900, well below that of any other residential property, even though the benchmark condo price is up 21.9% from October 2016. The superior appreciation in value is a reflection of demand, as is the fact that 70% of the new listings in October sold, half of these in less than 8 days.
Sales of North Vancouver condominium apartments in October were up 25% from October 2016 to 115, the highest monthly level in at least six months. However, we expect sales will accelerate over the last two months of the year. This is because new mortgage regulations come in on January 1 that will require all buyers to qualify at mortgage rates 2 per cent higher than the actual mortgage rate. This means that a buyer who would qualify now for a $500,000 condo would likely qualify only for condos priced at $415,000 or less.
But in October, less than 12 new listings for North Vancouver condos were priced below $425,000, while there were 20 listed at from $450,000 to $500,000. Of the 164 new listings, 107 were priced higher than $500,000.
We think the new mortgage rules are misguided – Metro Vancouver mortgage defaults are the lowest in Canada, at 0.15% – but we all have to live with them. We agree with the 115 North Vancouver buyers in October: it is better to buy before New Years to qualify for the condo you really want.
It appears inexplicable, but starts of new condos in North Vancouver have plunged 78% so far this year compared to the same period in 2016. As of October, just 234 condos had started construction compared to 1,103 by this time last year. This will likely put further upwards pressure on condo prices.
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