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, 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

‘Do or die’ time for Whalley, who fell in first game of Little League World Series

Team Canada goes down to powerful Panama in Williamsport, plays Spain Saturday

TONIGHT: Grand finale of Concerts at the Pier

East Beach event set to begin at 7 p.m.

Eagle tree cut down in South Surrey for ‘The Eagles’ development

Planned eagle preserve ‘a first for City of Surrey’

VIDEO: Burnouts in the Sky returns in honour of Bradley McPherson

Annual car show returns for first time since McPherson’s killer was convicted

Axe thrower finishes 30th at U.S. event

Surrey’s Tiffany Fatima may not have won, but she had ‘a lot of fun’

VIDEO: Surrey to host Western Regional Quidditch Championship in 2019

The fictional game in the Harry Potter series has become popular around the world, with 600 athletes in Canada alone

Smoky skies like a disappearing act for sights, monuments around B.C.

Haze expected to last the next several days, Environment Canada said

Canadians react to death of former UN secretary-general Kofi Annan at age 80

Nobel Peace Prize-winning former UN leader died early Saturday following a short illness

44 drownings so far this year in B.C.

Lifesaving Society urging caution to prevent deaths while on lakes, oceans and in pools

Some of B.C.’s air quality levels worse than Jodhpur, India

Okanagan, northern B.C. seeing some of the worst air quality globally

VIDEO: Ground crews keep a close eye on largest B.C. wildfire

Originally estimated to be 79,192 hectares, officials said more accurate mapping shows smaller size

Vancouver Island woman to attempt historic swim across Juan de Fuca Strait today

Ultra-marathon swimmer Susan Simmons to attempt to swim from Victoria to Port Angeles and back

Canadians believe in immigration but concerned about asylum seekers: study

Immigration, Refugees and Citizenship Canada paid for study to understand Canadian attitudes

These are the highest-paid actresses of 2018

In its list released this week Forbes said all 10 earned a total of $186 million before tax

Most Read