Recently, our beautiful city was shown as having the third least affordable housing market in the world in a survey by Demographia. We are all aware of the fact that Vancouver housing has become a major political and economic issue over the last few years, as home prices have shown dramatic double-digit increases.
Although the housing market has taken a hit in the last few months due to recent political actions such as the 15% foreign buyers tax, in the long term, house prices will continue to rise, making home ownership in the city an attractive proposition.
Consider the following factors when evaluating house prices in Vancouver:
- Vancouver has the most restrictive land use policies of any city in Canada. Supply side issues caused by municipal regulations dating back decades, have been one of the main causes of the current housing crises. This issue is now being addressed, but as we are all aware, policy changes take a long time to become reality.
- Investors from Mainland China and the rest of the world will continue to buy and invest in real estate in Canada. Canada is a highly respected, safe, stable and democratic country, with a generous immigration policy: this is more apparent now with the new administration in the US.
- Canadian currency is weak and is projected to remain so when compared with the US $, making our home prices very attractive to investors.
- We have a shortage of land: mountains to the north, a border to the south, an ocean to the west, and to the east a 22% agricultural land reserve. So there is very limited space left to build that single-family house.
- The West coast is attractive in terms of weather and geography than any other area in Canada. More than a million people are expected to move into the region by 2041, and this will put more pressure on the housing market.
- While the provincial government realizes that more homes have to be built and is gradually working to accommodate this, there will still be a time lag before this actually happens and the additional homes are built. Meanwhile, expect prices to increase as the shortage persists: simple supply and demand economics.
- As the city densifies to make room for the increased demand for housing, detached homes will become more limited and more expensive, as is the case in other major cities worldwide.
Buying a home in Vancouver is potentially a great investment. Take advantage of the current downturn and uncertainty by investing in one. We have a very experienced and knowledgeable group of real estate professionals available to help you. Please call us on 604 913 1000 or email us.