Harbour Centre View by Kenny Louie
Lots of talk about an overheated, unaffordable real estate market in Vancouver. Lots of speculation in the financial press around the world that Canada is in a housing bubble.
Joe Oliver, Minister of Finance, has stated that the Federal Government does plan to transfer more liability for mortgage insurance to the private sector but has no plans to interfere in the marketplace. He made the point that only Calgary, Toronto and Vancouver have seriously rising prices and he didn't think dampening the rest of the Canadian real estate market would be a sensible economic move for the country.
In fact even in Metro Vancouver it is the detached housing sector that is rising disproportionally to the rest of the housing market. Townhouses and condos are stable and relatively more affordable.
Vancouver BC Property Sales Trends in September
As the world political situation gets more fraught there is speculation that the international upheaval will bring even more money into this country with its stable government, clean financial institutions and strong legal system. The stats in September reflect the possibility that investment is being accelerated.
Attractive vibrant locations around the world are being targeted by the wealthy of Eastern Europe and Asia as desirable places to park their funds with real estate being a favoured investment. Prices in London are off the chart while real estate in the rest of the UK is not doing so well. Sydney with its proximity to China is a popular destination but Australia has many more rules about foreign ownership of real property than Canada does. Vancouver stands as the gateway to the Pacific Rim on the midpoint between Europe and Asia so attracts buyers coming and going.
As detached homes stand empty, awaiting the wrecking ball, there is outcry in Vancouver for rules like the Australian ones but there appears to be no chance that the federal or provincial government will change Canada's openness to foreign investment.
Richmond BC Property Sales Trends in September
The September 2014 residential property sales reached 2,922 in Greater Vancouver, which was a whooping 17.7 per cent increase compared to September 2013. The benchmark price for properties in Metro Vancouver was $633,500, which is a 5.3 per cent increase year-over-year. The sales of detached properties have jumped by 24.1 per cent from the 1,023 homes recorded in September 2013 to 1,270 detached homes sold in September 2014. The benchmark price for this segment alone rose by 7.3 per cent to $990,300.
As we can see on our infographic for Vancouver, the sales of detached properties in Vancouver West and Vancouver East combined were only a bit higher than the previous month. There were less attached properties sold in Vancouver than a year before in September 2014. This cannot be said about condo apartments, which remain one of the few relatively affordable housing options in Vancouver. Condo sales in September 2014 went up to 508 units, from 434 units sold in September 2013.
The sales of detached homes and townhouses in Richmond, BC have risen considerably in comparison to the same period last year. There were 152 detached homes sold in September 2014 in comparison to the 127 homes sold in September 2013 and the sales of townhouses rocketed from 69 to 114. The same isn't true for condo apartment properties in Richmond, BC, which were roughly on the same level year-over-year, only slightly dropping from 122 units sold in September 2013 to 119 units sold in September 2014.
Hopefully Vancouver will be Canada’s exception to the bubble – strong offshore demand seems to keep our prices high.