The Richmond condo market continues to heat up as more local buyers enter the market.
The Real Estate Board of Metro Vancouver (REBMV) released its July data last Thursday, showing that the average condo price in Richmond has now reached a record of $567,117 ($632 per square foot), a two-per-cent rise from June and a 27-per-cent rise compared to the same time last year.
“The Richmond condo market is as hot as it has never been. It has been rising in the past year and is now reaching a peak,” said Steve Saretsky, a realtor and real estate blogger.
The sales-to-active-listings ratio of condos in Richmond is as high as 80 per cent, according to Saretsky, which means that eight out of 10 condos are sold on the market.
“That’s a very hot seller’s market,” he said, explaining that a market with over 20 per cent sales-to-active listings ratio is considered a seller’s market.
“The condo market is so hot because it is now driven by local buyers and most of them can only afford condos,” he said.
Saretsky pointed out the most in-demand properties are one-bedroom condos, since many first-time buyers choose a one-bedroom unit as a realistic way to break into the housing market.
He predicts the condo market will keep going up in the short term, “But there is a limit to how much people can pay, especially in a local-driven market.
“The price can’t keep going up like this. Buyers will tire themselves out. The market will reach a point and start to stabilize, like what happened to detached houses after June 2016.”
The market for condos and detached houses in Richmond is increasingly heading in different directions, a trend Metro Vancouver has been seeing over the past a few months.
The benchmark of a detached house in Richmond was $1,682,000 in July, a 1.7-per-cent decrease from last year. The number of detached houses sold in July was 104, marking a drop from 122 in July 2016 and was 26-per-cent lower than the 10-year average.
“Most of the price declines and softness in the market are from higher-end luxury homes,” said Saretsky, who believes the weakened detached house market is a result of the 15-per-cent foreign buyer tax that was implemented by the provincial government a year ago.
“It has prevented some streams of foreign capital from entering the expensive detached house market.”
Also driven by local buyers, the Richmond townhouse market is rising steadily, with a benchmark price of $787,500, a 9.7 per cent rise from a year ago.
