Buyers of detached homes paid more than ever in 2014 for the privilege of owning their own house on their own parcel of land unencumbered by any strata designation. With increases of 8.9%, 5.6% and 15.8% in benchmark, median and average prices respectively, detached houses continue to reward their owners with exceptional returns on their investment.
Meanwhile the attached market, consisting of town homes and condos, continues to experience modest price gains if any.
This trend is very likely to continue as the supply of development land dries up for developers. In Greater Vancouver, almost all new product is in the form of townhouses or apartments at the expense of older detached homes that may have once occupied the land. The same thing is happening in our neck of the woods with more emphasis on high density housing. Simply put, the supply of detached homes is bound to decrease, if it hasn't already, while the supply of attached homes will continue to increase.
According to a report by Urban Futures, an additional 497,320 housing units will need to be built to accommodate Greater Vancouver’s growing population over the next 28 years. It is easy to predict that with the increased demand for housing there is very little to stand in the way of a continued pattern of rising prices for all categories of homes, most especially detached.
All in all, we could describe 2014 as a solid year for the real estate market, not a hot one, but overall a steady and consistent market. Most prognosticators are forecasting more of the same for 2015, barring an unusually high spike in interest rates. If an increase in rates becomes a reality, then look for an extremely hot market in the months preceding the increase as buyers scramble to take advantage of our current historically low rates. Such a situation would certainly boost prices in the short term for all categories of real estate but long term detached homeowners should continue to benefit the most.
