Richmond Vancouver REALTOR®

Blog › February 2019

Richmond Housing Report - January 2019


Richmond HPI Price In Decline

Detached home prices in Richmond suffered a dip towards the second half of 2016 and recovered to plateau out from mid 2017 to early 2018. Slower sales in 2016, 2017 eventually gave way to a price decline in early 2018. The pace of price decline accelerated and over the past 9 months, Richmond detached homes had declined 10% from $1.75M to $1.59M.

Using the price trend/band as shown on the chart below, there is a possibility for the price to decline another 15% to touch the lower green price band. Similarly, both townhouses and condos in Richmond may correct and fall lower to touch their respective price bands. 

Falling home sales is a precursor to falling home prices. The severity of the sales drops for the 3 housing types in recent months, compared to the 10-year average sales is pointing to a more challenging situation where significant price declines could happen.

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Average Price Per Square Foot

The average price per square foot decline for Richmond detached homes was more significant compared to those for townhouses and condos. The figures are affected by the proportions of new compared to resale homes. The figures being derived from MLS sales which are mostly resale units, the distortion in the figure is more for condos. It is generally known that new presale condos in Richmond are now posting at prices around $1,000 per sq ft or higher.

decrichmond cps

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Vancouver Housing Market Update


Vancouver Housing Report - January 2019 

The Real Estate Board of Greater Vancouver (REBGV) reported that home sales at 1,103 units declined 39.3% compared to January 2018. It showed a 2.9% increase compared to the previous month.

Last month’s sales were the lowest January-sales since 2009 and the sales were 36.3% below the 10-year January sales average.

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Effect Of Strict Mortgage Rules

The mortgage stress test mandated by the Office of the Superintendent of Financial Institutions, came into effect in 2018. The rules requires borrowers to show they can service their mortgage at their contractual mortgage rate plus 2%, or the 5-year benchmark rate published by the Bank of Canada. This has resulted in the cooling of the housing markets by limiting the ability of buyers to qualify for mortgages as it reduced the loans buyers would be able to borrow to buy a home.

Declining Home Prices

The benchmark price for single family detached homes at $1,453,400 was 9.1% lower than a year ago. The townhosue benchmark price at 800,600 was 6.2% over the past six months. The condo benchmark price at $658,600 was 6.6% lower compared to six months ago.

The housing market is undergoing some major adjustments to higher interest rates, stricter mortgage rules and government policy measures that dampened the market. In a declining housing market, home buyers are more cautions and they prefer to adopte a wait-and-see attitude to see how the market turns out.

Sellers who are motivated to sell are now adjusting to the market and many are starting to reduce their listing prices.  

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