After three years of jaw-dropping gains, house prices in West Vancouver and other wealthy Lower Mainland enclaves appear to be in retreat.
Since April, the price of a typical West Vancouver single-family home has dropped by 6.6 per cent, according to figures released this week by the Real Estate Board of Greater Vancouver.
The slide marks an apparent end to a spectacular streak for the community’s housing market that saw the price of a detached residence, as measured by the MLS Home Price Index, rise by almost 60 per cent in three years — to within a hair’s breadth of the $2-million mark. That figure has now sunk to a marginally more affordable $1.85 million.
“Prices in the region remain relatively stable overall, although we do see some reductions in the areas that have had some of the largest price increases over the last year or two,” said board president Eugen Klein, in a release.
Although Klein attributed the slide to the government’s recent tightening of mortgage rules, that change in the law — which eliminated the 30-year amortization option for government-insured mortgages — didn’t take effect until early July, more than two months after prices started to drop in West Vancouver and at least four months after sales had begun to slow, according to the board’s data.
By contrast, the previous tightening of the rules in March 2011 — when maximum amortization dropped from 35 year to 30 years — was preceded by a record spike in activity, as at least some buyers rushed to get into the market before the door closed, according to observers at the time.
West Vancouver home sales have been more than 30 per cent below the previous year’s in every month since March. In September, 57 properties sold, a year-on-year decline of 33 per cent, and the lowest total for the month since the 2008 slump.
A similar boom-bust pattern has happened in other well-heeled parts of the Lower Mainland, notably Richmond and Vancouver West, according to board figures, while the trend has been less pronounced in more modestly priced markets.
In North Vancouver, where a single-family home goes for a little over half what it would in West Vancouver, the price of a house has sunk by just 2.3 per cent — to $961,000 — since May. That followed a similarly less dramatic three-year run-up of about 30 per cent.
North Vancouver has nonetheless seen a marked slowdown in sales, with just 100 residences changing hands in September, down 33 per cent from 2011.
The North Shore housing market rebounded from the 2008 crunch with the rest of the region beginning in spring 2009, but West Vancouver and other tony areas quickly pulled ahead.
Although there are few statistics on the issue, it was widely reported at the time that the trend was the result of a surge in investment in very high-end homes by buyers from China.
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