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Metro Vancouver Homeowners’ Ardour for Condo Living Cools: Survey

Condominiums remain the dominant property type in Metro Vancouver’s housing market, but their appeal as a purchase option appears to be on the wane among existing homeowners, according to a new survey from the Bank of Montreal.

The survey, conducted by the polling firm Pollara for BMO, found that one-third of prospective homebuyers looking to buy within the next five years in Canada’s major cities were considering condominiums as an option.

In Metro Vancouver, however, the percentage of potential homebuyers considering a condo purchase had declined to 28 per cent, according to the report, compared with the 33 per cent recorded by Pollara in last fall’s version of the survey.

That compares with Toronto, where 31 per cent of homeowners considering a trade were thinking about condos, an increase of 11 percentage points from the fall survey.

“It tells me more buyers (in Vancouver) are looking at purchasing a detached home than they were a few months ago,” said Ashish Arora, an area manager in personal banking for BMO.

“The intent to buy is up in Vancouver; however, the segment in terms of condo (purchases) to detached has swung the other way.”

For Metro Vancouver, the proportion of homeowners who are considering a purchase within five years increased five percentage points to 58 per cent since last fall. That compares with a national average of 48 per cent.

Arora added that it is difficult to generalize about the reasons for the swing since it isn’t a “huge, huge drop” in intentions to purchase condos. However, he said that confidence in the market and continued low mortgage rates are factors at play.

“The decision of what to purchase, either condo or detached home, is primarily based on individual budgets and individual affordability factors,” he said.

While property sales across Metro Vancouver over the past couple of months have rebounded from their downturn in 2012, the bounce back for condominiums has not been as pronounced.

In its most recent sales report, the Real Estate Board of Greater Vancouver said realtors sold 1,068 apartments in the month of June, a rebound of 4.1 per cent over the same month a year ago. Sales of detached homes, however, were up 20 per cent.

On pricing, the board reported that the benchmark condo price hit $369,800 in June, which is up 2.2 per cent from January, but still 1.9 per cent below where prices were a year ago and a level that hasn’t gained any ground over the last five years.

The board’s benchmark for detached homes of $919,900, however, while still down 4.3 per cent from levels a year ago, is up about 15 per cent over the last five years.

The BMO survey isn’t reflective of the overall condo market since it doesn’t consider first-time buyers, which includes an influx of new immigrants who have been an important segment of many Metro markets, said Michael Ferreira, a principal at the market research firm Urban Analytics.

Scott Brown, a senior vice-president at Colliers International, said investor buyers have been a lot less active in the condominium market over the first half of 2013, but buyers who intend to occupy apartments are still active, particularly for older buyers who are downsizing.

The BMO survey did note generally that potential buyers over the age of 50 were more interested in condos than those under age 50.

Pollara surveyed a random sample of 1,008 Canadian homeowners to obtain its results, with 134 respondents coming from an area they define as Greater Vancouver. Nationally, the accuracy margin is plus or minus 3.1 per cent 19 times out of 20; however, the margin increases to plus or minus 8.5 per cent for Metro Vancouver results.

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