VANCOUVER, May 11, 2017 — Increases in home prices in the City of Vancouver have had a spillover effect in surrounding British Columbia municipalities. Centres within commuting distance of Vancouver City experienced the strongest spillover effect, however, price increases could also be seen in municipalities outside commuting range.
This analysis is part of Canada Mortgage and Housing Corporation’s (CMHC) latest Housing Market Insight (HMI) report on the link between Vancouver home prices and other major centres in British Columbia.
- Home price changes in the City of Vancouver have a measurable effect (and in the same direction) on the home prices of other municipalities.
- Stronger spillover effects are seen in municipalities closest to Vancouver, such as Richmond and the North Shore. As the distance from Vancouver increases, the spillover effects generally become weaker.
- House prices in municipalities that are outside of the commuting range are still affected by price changes in Vancouver. Migration out of Vancouver provides another potential channel for spillover effects.
The exact causes of spillover effects are complex and change over time. There are other factors that may have cancelled out past spillover effects or amplified them, depending on the particular example. These results are based on changes in the City of Vancouver home prices in isolation of other factors that would lead house prices to fluctuate jointly in several B.C. centres.
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As Canada’s authority on housing, CMHC contributes to the stability of the housing market and financial system, provides support for Canadians in housing need, and offers objective housing research and information to Canadian governments, consumers and the housing industry.
“Price changes in the City of Vancouver are linked to prices in other municipalities, both on the way up and on the way down. The spillover effects take years to fully work through other markets and have varying degrees of strength.”
Information on this release
Jeanette Wilkinson, Public Affairs