I recently attended a presentation by BCREA’s chief economist Cameron Muir on the current conditions and future projections for Vancouver’s real estate market. It was very interesting.
Here are the highlights, as per my notes
-affordability is the largest challenge, rising rates and tighter credit
-international migration equals population growth which is good for real estate which always performs in cycles.
-Vancouver is a Gateway City and over the last 10 years the world’s gateway cities have performed the best. The Asia connection is positive. China is rising and our linkages to Asia – transportation, students, brain power, will continue for the next 20 years
-Global economy is very integrated and will be more so.
-Canada will have a 3.3% GDP in 2011 which’ll result in rising employment and wages and more house buyers. Consumer confidence remains strong. Expect a higher Cdn $ over the short term and for sometime. Manufacturing will become more productive, investing in inventory and technology
-Only 55-60% of BBC services and goods are exported to the US, there will be more trade with China going forward. BC lumber and US housing starts are linked . Both are improving. Expect retail sales to equal former peak by year end
BC is in a post recession period and prices in spring were at record level. Rising rates will dampen demand. Sales to active listings graph shows a balanced market earlier this year, last December was a Sellers Market and as of May we are now in a buyers market.
Vancouver has 40% of all provincial real estate sales. Pent-up demand from 2008 fuelled sales in 2009.
Going forward there will be softness, rates will increase up to 3% in 2 years. Housing starts in 2009 will be equal to 2000.
BC migration averages approx 39,000 annually. Of that 75% are Asians and 25% of that figure are Mainland Chinese. These immigrants bring cash with them and have a high net worth but not high incomes. This scews the house price vs income graph
Incomes are the driver of housing wealth. BC is second to Alberta for population growth in the country. By 2020 there will be another half a million people moving to BC. By 2036 BC’s population will be 6 million. Over the next 20 years 36% of the province will be over 55 years.
BC has the lowest personal tax rate in the country but highest housing prices. Our property transfer tax is the highest in Canada.
Prices and sales will be down this year but will be better next.
Vancouver has positioned itself as a processing and distribution centre and transportation centre.
HST will result in more new homes under the $525,000 threshold. HST will be good for the resale market as there’ll be fewer new homes built. Buyers will move to the suburbs as Vancouver becomes too expensive.
A recent survey in Surrey showed May sales were 16% below the 10 year average and listings were 100% higher.
View the listings to sales chart. Housing starts forecast chart. Conventional mortgage rate in Canada since 1973
Have a comment or question? I’ll try my best to answer it.
keep up to date with vancouver’s changing real estate market, subscribe via RSS or email. Contact Maggie when you’re ready to buy or sell
search for listings on your own VOW (virtual office website)
You must log in to post a comment.