The Conference Board of Canada released a report this past Tuesday that declared Metro Vancouver’s resale real estate market balanced. This means that buyers and sellers are on equal footing when it comes to making deals on available properties. The report also dismissed the notion that a real estate bubble was imminent. Not the case, not any more.
But then there are those who dismissed the idea of a bubble as rubbish anyway. Robin Wiebe, an economist in the area, is one of them. He noted that prices went up; new homes went on the market. Prices in October were also two percent higher than in September, coming in at an average of $774,000 per home. That is also 15.3 percent higher than prices seen in October of 2010.
As far as listings, in October there were 60,600 homes on the market, 2.5 percent less than the listings in September. But, there were 14 percent more homes listed than in October of 2010. Sales in October were up two percent over September, numbering 30,072, and 0.8 percent higher than October of 2010.
Wiebe also commented on the expensive home sales seen in the region this past year, particularly in May and June. He no longer sees this as a factor, as these sales have largely moved out of the system. Things were a bit unbalanced back then, but that is no longer the case.
Could you please elaborate, based on data, why the Vancouver real estate market is not headed toward lower prices? My opinion is that if the Chinese economy cools off, and all signs are pointing that now, we will see less demand from international buyers, in turn less demand overall on Vancouver housing, and hence a downward trend in pricing. Many realtors, and those with a vested interest in the industry, seem to think this won't be the case. Can you please give us your opinion as to why it won't happen.
I look forward to your reply.
Hi Brian, I think you bring up some completely valid points. I agree with your point that demand from China looks to be cooling off, but would argue that this is only a portion (15-25%) of overall immigration to the Lower Mainland. Vancouver's overall housing market is strongly dictated by immigration, and the real estate market is, of course, affected by that. Add to the fact that most who immigrate here are often coming with wealth from other parts of Canada (or other parts of the world), and you consistently have a strong demand.
It's an unfortunate reality that Vancouver is Canada's winter paradise, where Canadian's can permanently escape the harsh reality of winter and still live happily within their home country. Unless the rest of the country tanks we will probably be experiencing a minimum of an inflationary increase in real estate prices over the next couple of years. In my opinion you'd want to get into the market before the HST goes away, the market will be slower yet steady up until then. After that, it's hard to predict what will happen.