Vancouver is one of the most fabulous places in Southwestern Canada and considered a visual paradise for many who have visited it. However, just like San Francisco or New York in the US, Vancouver is one of the most expensive places to live in North America. With an expense of about $1.6 billion, the city has the largest budget of any British Columbia municipality. Housing cost is one of the biggest budget lines for any person living in Vancouver. In December 2019, the Council passed the 2020 budget which, among other things, increased the property tax by 7%, the highest property tax increase in a decade. But has the property tax affected the housing prices?
Falling Housing Prices in Vancouver
A recent house-price survey released by Royal LePage towards the end of 2019 showed that the aggregate house prices across the Greater Vancouver declined by about 5.2% in the last quarter of 2019 compared to the same period in 2018. This was the first time in five years that the average decline in property value was reported in Greater Vancouver.
The fall in housing prices across the city varied by suburb and housing type. In some places, house prices recorded a growth rather than a fall. For instance, homeowners of Langley condos recorded a 2.2% increase in house prices while the prices of two-story detached homes in North Vancouver went up 0.4%.
The largest drop in house prices was witnessed by owners of condos in West Vancouver, whose property value fell by 16.8% to about $1.07 million. Bungalow owners across Greater Vancouver also experienced the largest decline in the fourth quarter of 2019. The prices of detached bellwether bungalow fell by 4.9% to $1.4 million. The dramatic fall in property prices was particularly more for high-end properties priced over $2 million. Townhouses averaging just below $1 million did not see much steep in prices.
Record Housing Construction Despite Falling Prices
Although Greater Vancouver recorded a fall in housing prices in the last quarter of 2019 for the first time in five years, the city saw a record level of housing construction in 2019. According to Canada Mortgage and Housing, construction of some 28,141 new homes began in 2019, up 20% from 2018. The new units brought the total number of units under construction in the Metro to a record 46,000 units. The new record set in 2019 exceeded the record set in 2016 by 200 units. The surge in construction is a result of the strong demand for homes in the Metro. However, the number of completed housing units in the coming years, especially the condominiums, will likely dampen the prices or rent.
The Average Monthly Rent
Vancouver is the highest-priced city in the country for a two-bedroomed apartment. According to Rental.ca, the average monthly rent for a one-bedroom apartment is $2,208 while a two-bedroom apartment is $3,049. The average rent per square foot in Vancouver is $3.4, with downtown as the most expensive area with $4.69 per square foot. The high rental prices in Vancouver have not discouraged people from relocating to the city.