Canada's Housing Bubble

Apr 08, 2010 Derrick Penner Vancouver Sun

Vancouver — Metro Vancouver saw the steepest increase in home prices of Canada's major markets in the first quarter of this year in a sales rebound characterized as an “irrational” response to market conditions.

The average price of a detached bungalow on Vancouver's east side hit $674,180 in the first quarter of 2010, a 25-per-cent jump from the first quarter of 2009, realtor Royal LePage reported Thursday in its quarterly survey of major-market housing prices.

A standard Vancouver east-side condominium saw an even steeper gain of 29 per cent to hit an average $402,000.

And an average Vancouver west-side bungalow, which dipped as low as $950,000 in the first quarter of 2009, had roared back to an average $1.15 million, a 21-per-cent gain, in the first quarter of this year.

“In Vancouver and Toronto, for instance, the dramatic unit sales fluctuations exhibit a significant degree of market irrationality: inordinately fearful when faced with poorer markets and overly enthusiastic when the tables turned,” Royal LePage CEO Phil Soper said in an interview.

In general, Soper said nationally averaged results “are not particularly useful in painting a picture of the country's neighbourhood real estate stories.”

Nationally, the average price of a detached bungalow rose 11 per cent to $329,209 in the first quarter of 2010 compared with the first quarter of 2009, and house prices were up across all key types included in Royal LePage's survey.