Everyone knows or has heard about the laws of supply and demand. Demand is supported by Greater Vancouver's annual growth of over 30,000 people. The bulk of this growth coming from immigration from four or five key countries. However, there is also another 5,000 Canadians migrating here per year since 2012.
With such a large volume of new people arriving with the intent to own their own homes, it has created a market with more buyers than properties available for sale. When this happens, the pressure of the market will push the prices higher. We have seen this happening in the past few years but the big question most have is, 'will prices continue to rise?'
Even with last year's explosion in pricing where prices were jumping from 25% to 50% range from the previous year followed by the government implementing programs to slow the the market and the following [short term] decline in pricing, the market is still pushing in many sectors.
Some people ask how can we know for sure when asking if pricing will continue to increase and for how long.
My answer is this.
There is no crystal ball. But if you follow the money and follow those more educated in this area than yourself, you too can make wise purchase decisions.
For instance. When you look at the current volume of permits taken out in most Greater Vancouver municipalities you can see there is extreme confidence in the new home market for townhouses and condominiums. New construction starts in the multi family sector were highest on record for March 2017. The developers collectively see the demand and intend on cashing in.
As reported by CMHC, a total of 2,486 homes were started in the month, with the majority of these – 2,044 units – being multi-family dwellings. The remaining 442 units were single-detached homes. By comparison, in March last year, 2,296 units were started, including 1,895 multi-family homes.
“Actual housing starts reached the highest level on record for March since 1972, driven by new apartment construction,” said CMHC market analyst Sandy Besporstov. *1
Affordability also plays a key role.
So let's look at what people are buying. Today, the condo market is on fire. Well priced units are usually getting multiple offers and bidding wars again. Prices are trending upward. Usually, I say buying in a hot market if foolish. However, when the market indicators show a continuing trend and the level of supply if far below the need, then it is likely a very wise time to buy.
If you want a more detailed overview of the market trends, I have reports from top development and marketing companies and the current real estate board reports I can share. Text or call Kevin Lynch at 604-307-9448.
*1 source if Business In Vancouver