Metro Vancouver's 2011 housing market cooled considerably after starting the year with a bang, according to a Real Estate Board of Greater Vancouver report released Wednesday.
"2011 started with very strong demand, especially in [Vancouver's] west side, Richmond and West Vancouver, but then it peaked in June and closed the year with greater balance between sellers' supply and buyers' demand," Greater Vancouver board president Rosario Setticasi said in an interview.
"[Prices] dropped about 1.5 per cent from June to the end of the year. But overall, the benchmark price for all residential properties increased 7.6 per cent for the year."
According to the report, nine municipalities saw double-digit increases in the benchmark price of a single-family detached home over the last 12 months, with the overall price for all residential properties rising to $621,674 between December 2010 and December 2011.
Although comparisons can change considerably on a month-to-month basis, little Port Moody ended the year with the largest increase in the benchmark price for a single detached home, a 34-per-cent rise from December 2010 to December 2011 to $933,000.
At the other end of the scale was Squamish, where the benchmark price for a single family home dropped 7.3 per cent to $458,000 over the same period.
For single detached homes, Metro Vancouver saw prices increase year-over-year by 11.2 per cent to $887,000, while Vancouver's west side rose 20.7 per cent to $1.99 million, West Vancouver, 15.8 per cent to $1.69 million, Richmond, 11 per cent to $1.1 million, and North Vancouver, 13.3 per cent to $978,000. Metro Vancouver apartments rose in price 3.7 per cent to $401,000.
The Greater Vancouver board's report concluded that total sales of all residential properties in 2011 reached 32,390, a 5.9-per-cent increase from the 30,595 sales recorded in 2010, and a 9.2-per-cent decrease from the 35,669 residential sales in 2009. Last year's home sale total was 6.3 per cent below the 10-year average for sales in the region.
Meanwhile, the Fraser Valley's real estate market in 2011 was below the 10-year average in property sales and above average in the number of new listings, according to the Fraser Valley Real Estate Board.
Fraser Valley board president Sukh Sidhu also said that there was a wide variation in pricing. "For example, in my community of Abbotsford, sales of single family homes dropped by almost seven per cent compared to 2010, pushing prices down slightly, while in south Surrey/White Rock sales increased year over year by 45 per cent," resulting in price increases.
The Fraser Valley board processed 15,529 sales in 2011 compared to 14,891 the previous year, while the number of new listings remained about the same - 31,592 in 2011 compared to 31,437 in 2010.
The board said that although 2011 ranks the third slowest year for sales since 2002, it was only 10 per cent less than the 10-year average of 17,210 sales.
In December, the benchmark price of a detached home in the Fraser Valley was $522,998, an increase of 3.3 per cent compared to $506,145 in December 2010.
The trend toward slower price growth is expected to continue in 2012 as more listings temper demand.
"We're expecting much less price growth this year compared to 2011," Robyn Adamache, senior market analyst, Metro Vancouver, Canada Mortgage and Housing Corp., said in an interview.
"We're calling for about a two-to three-per-cent increase in price growth in 2012, close to the rate of inflation."
Tsur Somerville, director, centre for urban economics and real estate, Sauder School of Business at the University of B.C., agreed. "My sense is that flat or little growth [in prices] is likely."
2012 will also be largely influenced by confidence levels in the global economy, and reduced levels of investment from China or Chinese immigrants, he said.