I had the esteemed pleasure of hearing Charles King, Regional Manager, Market Analysis and Research & Information Transfer of the BC Region for Canada Mortgage and Housing Corporation speak for the Greater Vancouver Home Builders’ Association last week. He has some wonderful insights I would like to share. In the recent years we have seen the Lower Mainland develop into an international rather than a regional market, and as such, we saw an escalation of prices in the housing market. In 2009, however, immigration laws tightened and the threshold for entrepreneurial immigrant increased from $800,000 to $1.6 million. This decreased immigration and had a hand in the market stabilization.
In BC, 70 percent of residents are home owners and only 42% of them require mortgage financing. On average, BCers make more lump sum payments to their mortgage than the average Canadian and as such, use housing as a system of “forced savings”. Many home buyers see real estate as a viable investment strategy and according to CMHC, 46% of downtown Vancouver properties and 17%- 25% of Fraser Valley properties are held as investments.
Through 2011 we are expecting a moderate increase in the housing market of just 2%, and in 2012 CMHC foresees a 3% increase. Thankfully, the market in the Lower Mainland has stabilized or even improved over the last year. This is proven by the City of Vancouver approving laneway homes, similar to the coach home concept popular in the Valley. The US remains in a state of recession as over 18 million homes are vacant. Until this trend shifts, the housing market will see little recovery.
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