Vancouver’s sky-high home prices have created a spill-over effect in outlying markets, with varying degrees of impact based on proximity to the city centre.
“Price changes in the City of Vancouver are linked to prices in other municipalities, both on the way up and on the way down,” Braden Batch, Senior Market Analyst, Market Analysis Centre at CMHC, said. “The spillover effects take years to fully work through other markets and have varying degrees of strength.”
Vancouver’s influence is obviously most-felt in regions within commuting distance to the major city, but markets outside that range are also being impacted, according to CMHC’s latest Housing Market Insight report.
“The exact causes of spillover effects are complex and change over time,” CMHC said in the report. “There are other factors that may have cancelled out past spillover effects or amplified them, depending on the particular example. These results are based on changes in the City of Vancouver home prices in isolation of other factors that would lead house prices to fluctuate jointly in several B.C. centres.”
The fact that prices around Vancouver are increasing should come as no surprise, with many potential buyers and, indeed, investors setting their sights on more affordable pastures.
And that trend will likely continue, with Vancouver prices expected to continue to increase.
“Home prices will likely continue to increase until we see more housing supply coming on to the market,” Jill Oudil, Real Estate Board of Greater Vancouver president, said.
The benchmark price for a home in the Greater Vancouver area was $919,300 in March, up 12.7% year-over-year.
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