Last Saturday I attended Ozzie Jurock’s Real Estate Outlook in Downtown Vancouver. It looked like a sellout. I have followed his predictions for a long time and his track record is good. Here is an overview of his opinion of the Vancouver real estate market from my notes.
The current financial situation in the U.S. is serious and its magnitude is larger than past recent financial crises the world has experienced. But the world always has bad news.
IN ’74 the average price of a Vancouver house was $54,000 and sales dropped 42% due to the US stocks crash. The news said “we’ll never see these real estate prices again.” Credit became tight.
’87 we saw Black October when the stock market crashed 22% in one day and the markets closed for 4 days. Pension funds increased their real estate investments.
’90the Reichmans moved to New York and made $500 million, as the economy turned down due to 13.5% 5 year term mortgage rates. San Diego real estate prices dropped 35% and are now 410% above that.
‘95 we saw the Leaky Condo Crisis in Vancouver. Back then you could buy a Yaletown condo 560 sqft for $100,000. The news said “no-one would buy a condo in Vancouver again.”
’95-01the Hong Kong buyers sold their Vancouver real estate and left town, we had an NDP government which resulted in B.C.’s credit rating being downgraded, companies and individuals were leaving the province. Then came 9/11. Prices dropped. Realtors were roaming like hungry tigers…50% of them left the business
Back to Basics – Does Real Estate Have a Use? Can you live in it, rent it out or leverage it?
We have inflation, inward migration, low interest rates, affordability, shift to hard assets (real estate), baby boomers moving to BC and they have cash and many have substantial inheritances, 2010 on the horizon. All Canadian Metro areas will be a good investment in the long run. Vancouver will fare well.
Tight lending will effect the developers ability to borrow and build and the self-employed but we muddle through and collective confidence determines the markets, so get positive!
We are moving into a new world, a new kind of government, chartered banks will smarten up, stock brokers will be more careful with what they sell. People will be more interested in cash flow (real estate) going forward than in stocks. The year after the Olympics is a good year for real estate – 2011
Be smart, keep your eyes open and make offers….many if you have to….and get the right deal! This is the market that will make you filthy rich in the future!
Buying or selling a Vancouver condo and wish to chat about it? Please fill out my contact form.
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I believe the Oz view is correct and that we will look back on this time as a buying opportunity; after we weather a period of contraction where positive cash flow, or the lack thereof, will make or break a deal. This applies to investment real estate as well as the stock market. We (re-)learned in the dotcom bust that eventually the old rules do apply and while you can defy gravity for a while, don’t throw away the landing gear. For the next cycle or two cash flow will be the critical metric whether in multifamily, single-family or condominium investing.
Giovanni Isaksen
If you think of buying a property in Vancouver today, you should plan it carefully because the prices are now higher. On the other end, to have a Vancouver property is like having a jewel in the city.
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