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Increase in new home prices reaches 7-year high in Metro Vancouver

cbc.ca logo cbc.ca 2017-08-12 Lien Yeung
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Despite efforts by government and regulators to curb Metro Vancouver's hot housing market, new home prices have continued to climb in the past year.

Recently released data from Statistics Canada shows the overall price of brand new houses and townhomes in the region has soared 6.2 per cent in the 12 months since June 2016.

"Last time [the new house price index] grew larger than 6.2 per cent was in June of 2010," said analyst Rohit Verma, adding prices rose 6.7 per cent.

The agency has numbers dating back to 1981.

Verma says the information is gathered through a monthly survey of home builders and their contractors, excluding new condominiums.

Across the country in the month of June, Metro Vancouver saw the greatest gain at 1.5 per cent overall. Ottawa-Gatineau, Ont. followed at 0.9 per cent.

Verma says the main reason cited for the increase was "improving market conditions." 

Cooling a hot market

It's more evidence of the resiliency of the region's real estate market, despite government efforts at all levels to temper prices.

Last August, the previous Liberal government introduced a 15 per cent tax on foreign home buyers in Metro Vancouver.

Two months later, mortgage rules were tightened across Canada.

Home buyers applying for mortgages with less than a 20 per cent downpayment had to undergo a "stress test" to determine if they could afford to pay back a loan if interest rates rose.

And rates did rise.

Last month, the Bank of Canada raised its key interest rate by 0.25 percentage points — the first time it had increased it since 2010.

All of that hasn't stopped the market from climbing or put affordable homes within the reach of most people.

Sales in July were 0.7 per cent above the 10-year sales average for the month, according to the BC. Real Estate Association.

The Multiple Listing Service Home Price Index composite benchmark price for all residential properties in Metro Vancouver is $1,019,400 — an 8.7 per cent increase compared to July 2016

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