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Tuesday, August 16, 2011 - Looking for a home you can afford? Compromise

Conference board senior economist suggests the situation facing homebuyers is 'less dire than at first glance'

By Brian Morton, Vancouver Sun

A Conference Board of Canada senior economist has suggested there are affordable deals in Metro Vancouver's expensive housing market, but is that the case?

There are, if you're willing to be flexible.

June real estate numbers revealed a wide discrepancy in benchmark prices (the cost of a typical home) throughout the region, with significant savings outside the central core.

Two towns that stood out as potentially good deals for buyers seeking affordable single detached homes were: to the north, Squamish - just 30 minutes to Whistler and 45 to 50 minutes to downtown Vancouver on a new four-lane highway - at $508,000; and, to the east, Mission - the easternmost station for the popular West Coast Express commuter train - at $360,000.

In between the two towns, prices were generally higher, with town houses and condos considerably cheaper.

"I definitely think there is [affordable product]," Central 1 Credit Union economist Bryan Yu said in an interview Wednesday about the matter. "Detached homes in certain areas might be out of reach, but if [buyers] are willing to go east or look at different product types, it's likely they could find product that meets their needs. It's all about making compromises. If a detached home is too expensive, they can go to a condo or a townhome."

In an op-ed from a Conference Board report published in The Vancouver Sun Tuesday, senior economist Robin Wiebe noted that the average resale price in Metro Vancouver was up more than 20 per cent from a year earlier in both May and June, the latest in a six-month string of double-digit hikes, and well above the six-per-cent long-term trend of price growth.

But he said the situation facing homebuyers seems "less dire than at first glance," with Vancouver's average resale price skewed upward by sales of expensive homes in pricier neighbourhoods and by a modest shift toward single-detached homes that carry higher price tags.

Wiebe - who concluded that the growing belief Vancouver has a housing bubble should perhaps be reconsidered - said that for those on tighter budgets market conditions in all price ranges below $500,000, which includes many condos and townhouses, have shifted in favour of purchasers.

He said that while Vancouver's market is certainly top-heavy, "those seeking shelter, both physically and from high prices, can still find relatively affordable units and decent bargaining conditions if they are careful, knowledgeable, flexible and ready to shop around.

Wiebe added: "Savvy shoppers can still do relatively well in Vancouver by searching for the right unit in the right location, which after all, is the whole mantra of real estate."

The conference board report also noted that in Vancouver, while annual gains remain large, price growth decelerated for the second straight month in June.

In June's housing index by the Real Estate Board of Greater Vancouver, the benchmark price for all single detached homes in Metro Vancouver was $902,000, with much higher prices in areas like West Vancouver and the west side of Vancouver.

However, the four cheapest areas for single detached homes were in Maple Ridge ($450,000), the Sunshine Coast ($403,000), Pitt Meadows ($540,000) and Squamish.

Besides Mission, the lowest prices for detached homes in the Fraser Valley region were Abbotsford at $420,000, Langley at $524,000, and Surrey North at $511,000.

Meanwhile home resale prices in Canada notched their biggest monthly rise in May since last July, according to the Teranet-National Bank Composite House Price Index released on Wednesday.

The index, which measures price changes for repeat sales of single-family homes in six metropolitan areas, showed overall prices were up 1.3 per cent in May from April, the second straight monthly gain of one per cent or more. It was also the sixth straight monthly gain.

Vancouver and Toronto, already expensive markets, were the pricegain leaders, up 1.6 per cent and 1.7 per cent, respectively.

The Vancouver market was especially heated in the spring as buyers tried to get in ahead of the implementation of tougher mortgage rules in mid-March.

Time lags between the actual home sales and their entry into public land registries may account for the large gains in April and May after the mortgage rules were already in effect, the report said.

bmorton@vancouversun.com With files from Postmedia News

© Copyright (c) The Vancouver Sun

posted in News at Tue, 16 Aug 2011 08:36:10 -0700

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