Vancouver real estate: why townhouses sometimes sell at higher prices than detached homes
Detached houses represent the traditional idea of what is a home.
A home is four walls, a roof, and a yard.
With a single-family home, the title holder owns both the house and the land it sits on.
In places like Vancouver where supply of land is limited, land is very valuable.
This reminds realtor David Hutchinson of a question from a former client.
“I was once asked by a client who was selling her detached house why townhouses were selling at the same price as her older home with a large yard,” Hutchinson related to the Straight.
This got the Sutton Group-West Coast Realty agent himself thinking.
“Where's the value? Is it in the dirt?” he recalled.
There’s no one answer.
“I replied, ‘Well, some buyers like newer, different construction, one that has all the new bells and whistles’,” Hutchinson said, referring to townhouses.
Like detached residences, townhouses are ground-oriented homes.
But unlike detached homes, owners of townhouses have to share walls and common spaces with their neighbours.
“It really depends what you're looking for, but others see the value in the land,” Hutchinson said.
Although townhouses generally cost less than detached homes, there are many examples wherein the opposite is true.
Hutchinson provided a long list of sold and listed properties in Vancouver to illustrate that a number of townhouses sell for higher prices than single-family homes.
One is a west side detached home at 4417 West 16th Avenue. Built around 1920 and located near Pacific Spirit Park, the four-bedroom and two-bath property sold on July 13, 2021, for $2 million.
Meanwhile, there’s a three-bedroom and four-bath townhouse at 4023 Vine Street, which is also a west side address.
This townhouse was built in 1974 and renovated in 2010. It sold higher than the detached home at 4417 West 16th Avenue for $2,150,000 on July 4.
In addition to offering the experience of ground-oriented living as detached houses, townhouses also provide convenience as these are strata properties like condos.
“Moving from a condo to a detached house can be challenging,” Hutchinson said.
Suddenly, the Sutton Group-West Coast realtor explained, there is no property manager, concierge or caretaker, to contact.
“If there's an issue with your plumbing, roof, or gutters, the only person you can call is yourself,” Hutchinson said.
And, finding a good contractor, especially for small jobs, can be very difficult and expensive, the Vancouver realtor added.
“Not to mention, the general, and ongoing, upkeep of a detached house. Everything from the never-ending gardening, tree pruning, roof cleaning, grass cutting, and, of course, the occasional exterior house painting,” Hutchinson said.
This can all seem overwhelming to the average buyer, he added.
“So, even though the detached house may have some more potential as an investment, the townhouse option gives you much more time for other activities,” Hutchinson said.
One is when vacation time arrives.
“Basically, if you go on a holiday, you can just shut the door, and off you go,” he added.
On August 6 this year, the Straight wrote about a Dexter Realty report that townhouses are the “most in-demand” type of home in Greater Vancouver.
However, the report noted that there is a “lack of listings” for this type of home.
Based on official figures from the regional real estate board, townhouses had the highest sales-to-active-listings ratio at 47.8 percent in July 2021.
In comparison, detached homes had a sales-to-listings ratio of 25.5 percent last month. Condos had a rate of 37.3 percent.
As a general rule, a ratio of 21 percent and over means it’s a seller’s market.
Meanwhile, a ratio of 12 percent to 20 percent means a balanced market. A ratio of 11 percent and below means a buyer’s market.
Generally, detached homes are the most desired properties, and this is reflected in prices.
In July 2021, the benchmark price for a detached home in markets served by the Real Estate Board of Greater Vancouver rose to $1,801,100, representing a 21 percent annual increase from July 2020.
This price is almost double the benchmark price of an attached home, which was $949,400 last month, making for a 16.7 percent yearly increase.
For condos, it was $736,900 in July 2021, which means an 8.4 percent increase from the same month last year.
Meanwhile, the Fraser Valley Real Estate Board covers Surrey and nearby markets.
In July 2021, the price of a typical single-family home in this region increased to $1,319,200, or up 30.9 percent compared to July 2020.
Meanwhile, townhomes had a benchmark price of $688,400, an increase of 22.3 percent compared to July 2020. The price of a typical apartment increased 13 percent to $494,000.