66 | VANCOUVER WORDS | Sean Lightbown
SNAPSHOT
www.opp.org.uk | DECEMBER 2011
,
Vancouver is a beautiful city in a beautiful location, ideally placed on the other side of the North Pacifi c from China. And buyers are fl ooding across.
A
lthough it is not often on the tip of many people’s tongue as one of the world’s leading real estate
hotbeds, Vancouver’s residential property market was recently ranked the third most unaffordable in an international study by the seventh annual Demographia International Housing Affordability Survey. Overseas property buyers have
been fl ooding into Canada’s leading Pacifi c coast city for years now, and it is especially popular with Chinese investors. Prices are on the up. This surge in the market was recently underlined by the Royal Bank of Canada, which reported that the city’s affordability rate had dropped again the second quarter. The law of supply and demand is
driving up the average house price in Vancouver very fast indeed.
“Vancouver’s market is without a doubt the most stressed in Canada and faces the risk of a downturn”
The proportion of pre-tax household
income needed to service the cost of owning a home has risen by 1.4% in the past year, and many local agents are beginning to wonder about the ramifi cations of this increase in home costs and affordability. The bank’s chief economist, Craig
Wright, told OPP that “Vancouver’s housing market is without a doubt the most stressed in Canada and it is now facing the high risk of a downturn.” And a lot of this frantic activity is being driven by overseas buyers. Chinese
activity in the market is increasing according to Colliers International, which recently reported that 29% of all homebuyers in the fi rst quarter of 2011 were from the Asian superpower. Andrew Hasman, a realtor in the
city, told OPP that “anytime you have extremes in markets, it’s never healthy. You end up with a bubble.” “If the local economic base can’t
support these levels, then at some point you’re going to have a lot of people burned big time. It’s not sustainable.” He added that Chinese buyers are “what’s driving the market. In fact, of
single family homes that have sold in the last 18 months, I would say, that the Chinese make up conservatively 70%, probably 80%, of the buyers”. September saw the current average
Vancouver residential price stand at $627,994 according to the Real Estate Board of Greater Vancouver (REBGV)… an 8.8% year-on-year increase but a slide since the $630,921 peak of June this year. The month also saw 5,680 new listings, the third highest volume for a September in 17 years and a 20.1% increase from September 2010. This could herald the return of a semblance of a buyers’
Montreal
Condo Apartments 45 sq.m 70 sq.m 90 sq.m 120 sq.m 200 sq.m Toronto
Apartments 45 sq.m 75 sq.m 120 sq.m 200 sq.m
Vancouver
Apartments 60 sq.m. 120 sq.m. 200 sq.m.
425,100
1,052,880 2,803,600
1,604 n.a. n.a.
4.53% n.a. n.a.
7,085 8,774
14,018
26.74 n.a. n.a.
Apartment statistics across three leading Canadian cities Cost (US $)
45 sq.m
Cost (US $) To buy
217,665 336,700 432,090 585,960
1,118,000
Monthly Rent 1,382 1,899 2,149 2,792 3,952
Yield (p.a.)
7.62% 6.77% 5.97% 5.72% 4.24%
Price/Sq.M. (US.$) To Buy
4,837 4,810 4,801 4,883 5,590
Price/Sq.M. (US.$) Monthly Rent
30.70 27.13 23,27 19.76
market. “There’s more competition amongst home sellers in today’s market, providing more options for prospective buyers,” Rosario Setticasi, REBGV president said. ”Buyers now have more properties
to choose from and more time to make decisions compared to the spring season.” However, compared to other Canadian
cities, Vancouver’s rental yields are poor. Global Property Guide’s research found that yields were around 3% lower in Vancouver than in other big Canadian urban centres.
336,555 530,400 741,480
1,394,800
1,756 2,444 3,308 n.a.
6.26% 5.53% 5.35% n.a
7,479 7,072 6,179 6,974
39.02 32.59 27.57 n.a.
Market Snapshot Vancouver
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