A Crazy Real Estate Market in Squamish: Condo Prices Surge 31 Per Cent Over Last Year

By Carrie Chase
Published: Sptember 28, 201

For those of us who have lived here for a while, it’s no secret that Squamish has been discovered.  Whether it’s the spectacular views from the top of the Gondola, the kiteboards in Howe Sound, or the great microbreweries and restaurants, there’s something for everyone.  We have that ‘cool factor’ right now, and that means that our housing market is hotter than hot. 

If you’ve been invested in the market for a while, that’s great news. It used to take a year or more to sell a house, a real challenge for people who needed or wanted to move on.   As of this July, it took only 43 days on average.  So, we have a little more choice and flexibility than we may have had in the past. 

 Of course, with upsides come some downsides, a lot of change and upheaval.  Residents who may not have been able to before are choosing to cash in, pocket the equity for retirement, and move to cheaper municipalities.  Young people who have lived here all their lives are finding it challenging to stay. 

No doubt about it, it’s become way more expensive to buy here.  The most recent real estate report for Squamish shows that an average detached house costs $970,100, an average townhouse $669,400, and an average condo $445,800.  These are year over year price increases of 19.5 per cent, 10.4 per cent, and 31 per cent respectively – pretty crazy.   

Although we’re still a small town, there are a number of factors at play here.  The first is our proximity to Vancouver.  We’re only 45 minutes away from one of the least affordable cities in the entire world. According to a study last year, which compared housing prices to salaries, Vancouver placed third for unaffordability – only Hong Kong and Sydney were worse. 

Vancouver is an international city, and crazy housing prices has become a global problem. Whether we’re talking about Belgium, or Sweden, or Spain, or Australia, it’s getting more and more expensive to own real estate almost everywhere around the world.

 So, what’s happening?   A few things. 

Closer to home, Vancouver buyers have no choice but to move to bedroom communities and commute to work.  Looking at the numbers for East Vancouver, traditionally considered a more affordable market, an average house costs $1,561,700.  In North Vancouver, it’s even worse, at $1,716,800.  So, despite our sticker shock, it’s no wonder that Vancouver buyers still see us as cheap.   

 More and more, they’re choosing to come to our beautiful community instead of places like Coquitlam, with their own traffic and congestion problems, and where buying a house is still going to run you an average of $1,276,500.  It sure looks like Squamish prices may still have some room to grow in comparison to other Vancouver bedroom communities. 

 On a more global scale, there are a lot of very wealthy people all over the world who want to own property in the beautiful Sea to Sky corridor – to come visit, and as an investment.  Foreign investment is more typical in Whistler than here in Squamish, but when Whistler prices for houses are up 18% from last year to hit an average of $1,594,700, both foreign buyers and Lower Mainland locals will be thinking a lot harder about Squamish.    

Government policy is having an impact, but not in the way we might think.  The recent foreign buyers tax, for example, had some short-term impact, but the market rebounded quickly, and prices haven’t been affected overall.   In Vancouver, price growth for houses did slow from last year, but price growth in townhouses and condos has been really strong – we’re seeing similar trends here in Squamish. 

 As long as interest rates stay so low, housing prices are likely to keep going up.  10 year bonds, for example, are paying 1% – not very attractive earnings for an investor.  So, instead, people are looking to the real estate market to make money.    At the same time, with interest rates so low, people who might not have been able to afford to buy a house under more ‘normal’ interest rates, can continue getting into the market. 

Rates have been abnormally low for a very, very long time.  If we look back to 1990, the bank rate has been as high as 16%, and many remember even higher rates in the 80s.   Governments around the world have so much debt, they keep trying to keep global interest rates as low as possible – they don’t have much incentive to raise rates.   So, most economists are predicting that any rate increases are going to be fairly slow, and fairly manageable for most people to absorb. 

Demographics data suggests that demand for Vancouver and surrounding communities will keep going up, as we continue to attract new people to the region. At the same time, a newly elected government has pledged to get the housing market under control.  But, how much control can a provincial or local government really have in an environment that is so affected by global supply and demand, and macroeconomic issues?

 It can be confusing and complicated.  Most people are asking themselves:  Is this just the beginning of price increases in Squamish, or are we in a market bubble waiting to burst as soon as the economy weakens or interest rates go up in a big way?  That’s the million dollar question, isn’t it?  There are good arguments on both sides.  If we knew for sure what would happen in various asset markets, including housing, we’d all be very rich.

Carrie Chase has an MBA from Simon Fraser University, spent 25 years in banking, most recently as a Vice-President Commercial Banking at RBC, and currently lives and works here in Squamish as a real estate investor, developer, and Realtor at Macdonald Realty. 

Comments

  1. Elizabeth says:

    As beautiful as Squamish is, my husband lives there for 8 years and myself for 4, you forget to mention a few reasons people are selling in Squamish:
    Increasing property taxes, making it highly unaffordable
    No real jobs and no jobs paying a living wage
    The very reason people move to Squamish is the nature which they seem to be destroying at a rapid rate
    No affordable accommodation for the people who work there
    No infrastructure to support the rapid growth

    I support growth but It’s becoming another playground for the wealthy which is a shame

    • Dave says:

      100% nailed it Elizabeth, I have been here for close to 20 years and over the past 2 -3 years the appeal of this town is gone it has become a rich mans playground and lost its small town feel. Without any jobs our tax rates will continue to climb even more so with the relentless development that is occurring. I figure we have another 2 years left and we sell and leave this place. Unless you work an IT job from home or are in the residential construction industry there is nothing here for work and at the rate we are rezoning industrial lands there never will be. Its sad that our mayor and council have let the developers call the shots.

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