Based upon the most recent statistics from the Real Estate Board of Greater Vancouver’s Home Price Index, benchmark prices for residential real estate have shown a slight to moderate decline since May 2012, depending on housing type.

Click above for greater detail.

Source: REBGV stats. (The home price index measures the rate of change on housing prices based on resales data to obtain benchmark prices.)

For perspective, the benchmark price for single family has declined 4.8% since the peak in April 2012. Overall, since July 2010, single family homes prices in Richmond have risen 15.2%, while townhouses have risen 5.1%, and condos have actually declined 0.6% during the same period.

From a new supply perspective, there are currently estimated to be approx. 5,000 housing units under various stages of approval and development in Richmond (ie. 1-5 years delivery), most of which are either woodframe or concrete multifamily units. New townhouse construction comprises less than 7.0% of the total new units being built. New single family construction in Richmond is currently limited to small scale and single lot developments.

The Real Estate Board of Greater Vancouver has released data for July 2012 which shows that pricing is beginning to be negatively impacted by slowing sales. A selected grouping of housing types and areas, shown below, shows pricing changes over the last two years.

This comes as July was the slowest month for home sales in Metro Vancouver since 2000. Of course, prices are still up in most areas YoY, but there has been a consistent decline in June/July  across all types and areas. Single family homes have shown the greatest run up in prices over the past two years.

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The Home Price Index (HPI) measures local housing price changes similar to the consumer price index.

Source: REBGV stats

Does Vancouver’s hot investment market make building a better option?.

Consistent demand and high lease values in Vancouver’s downtown office and retail property markets combined with low interest rates continue to fuel a sizzling investment market.

“I don’t think I’ve ever seen the investment market this robust, vibrant and strong. We get multiple bids on everything and anything,” says Ross Moore, director of research for CBRE Canada.

A review of resales data for newer condos in Downtown Vancouver (2 years old or less) shows that sales activity has slowed since the beginning of 2012 but pricing has maintained an average around $800 per sq ft.

The vast majority of sales are between $600 and $1,000 per sq ft depending on the building/unit quality and location, with some sales such as units in The Erickson and Fairmon Pacific Rim showing sales values above $2,000 per SF. One can speculate that given a slowdown in sales activity, pricing will be affected eventually, particularly at the lower end of the spectrum where there are competing new developments in presales and/or under construction.

Source: MLS

Commercial mortgage rates continue to remain attractive, supported in large part by bond yields that have continued a downward march. As of Monday July 23rd, the yield on 5-year GOC bonds was 1.12%. Financing options remain available for stronger assets below 3.50% on five year money.

Source: Bank of Canada