|
Great West Life
Vancouver’s property market bounces back and is poised to be stronger than ever
| Text : Elizabeth Kerr | Photo : www.thinkstockphotos.com |
With the Pacific Ocean to one side and the Rocky Mountains to the other, Vancouver is one of the world’s most scenic and liveable cities — and anyone from Vancouver will tell you that. Urban without being overwhelming, Canada’s third largest metropolitan area has a laid back pace that belies its economic importance and has been attracting buyers from around the world — and Asia in particular — for years. Only moderately affected by the financial meltdown of 2008, Vancouver’s property market looks to be holding firm, and the immediate future is looking bright.
A bump from the 2010 Winter Olympic Games would be expected, but the rise in interest in Vancouver pre-dates the actual Games. “The Winter Olympics resulted in a bump in the real estate market prior to the event. Vancouver won the bid in 2003 and real estate prices have been on a relatively strongupward trajectory since that time,” explains Macdonald Realty Group’s Vice President of Corporate Strategy Dan Scarrow. “The [effects] on real estate prices post-Olympics has been more muted; however, the long-term effect of the Olympics on real estate activity in Vancouver will be positive.”
Few were spared the wrath of 2008’s global financial agony, but things could have been much worse than they were in Canada. The country’s mixed economy spared it from more considerable damage and, “Vancouver, in particular, fared very well through the turmoil,” in Scarrow’s view. Property prices were off 25 percent from their mid-2008 peak but rebounded strongly enough in mid-2009 to surpass their previous peak. “This indicates that the housing market in Vancouver was effected largely by psychology rather than market fundamentals,” theorises Scarrow.
So who is driving the market these days, and what kind of market exactly is Vancouver? Scarrow breaks down the three traditional buyer segments: “The lower end is still driven by local buyers. Before the financial crisis, investors played a large role in Vancouver’s real estate market, however, since then, the market has shifted more towards owner/occupiers as investors remain relatively skittish about the global economy.” Pure investment has been on a slow rise in the last few months, but it has yet to reach pre-2008 levels, as global economies are still in a recovery process.
It comes as no surprise to determine who’s driving Vancouver’s luxury market. “The higher-end of the real estate market (over CA$2 million) is being driven largely by Mainland Chinese buyers. That’s not to say they are the sole purchasers of these properties, but their presence has resulted in this price range being highly active over the pastseveralyears.” According to a February report in the Vancouver Sun, 31 homes priced over CA$5 million were sold in Greater Vancouver in 2009. But as Scarrow pointed out, they’re not alone: Australians, Europeans and Americans are also getting on the Vancouver bandwagon. Properties in key locations like Shaughnessey, South Granville, urban Yaletown, and tony Coal Harbour, Point Grey and Dunbar (Vancouver’s most expensive location per square foot of land), even with a strong Canadian dollar, are also something of a bargain — with land — for Hong Kong and Mainland buyers.
Vancouver, and Canada in general, has the kind of government and social atmosphere that has made it an investment and immigration preference for decades. “Canada is in a unique fiscal position in the world with relatively low public debt and deficits and a quality of life that is second to none. Thispoliticalandeconomic stability is attractive to a whole host of people from around the world who see troubling times ahead. This, combined with Vancouver’s natural beauty, makes it a perfect place to raise a family,” Scarrow reasons. For Asian buyers, Canada is a strong choice for wealth protection and a good spot to send children for a Western-style education. In addition, Vancouver is, quite simply, relatively close to home.
The same luxury pattern evident in Hong Kong is slowing broadening in Vancouver. The high-end market has been strong for the last few years, including the recent recession, and the city’s burgeoning international image is attracting affluent buyers. “Vancouver’s famous Coal Harbour neighbourhood, overlooking the mountains, ocean, and Stanley Park, now sells at nearly $2,000 per square foot, where less than 10 years ago, it sold for less than $500,” states Scarrow. That’s a middle-class or entry-level price in Hong Kong, where space it at a premium. If Canada has one thing it’s land, and Vancouver has seen its share of shifting with the influx of overseas wealth. “There are two distinct markets in Vancouver, the luxury market and the local market. Like Hong Kong, Mainland Chinese buyers are the largest players in the luxury market and are bidding up prices at a ferocious rate,” admits Scarrow. “This includes former family neighbourhoods like Dunbar and Point Grey, which now boast ‘average’ prices well in excess of $2 million.” But unlike in Hong Kong, the local market can move, and has, “responded by moving east, with former low-end markets such as Main Street, and Commercial Drive gentrifying in order to accommodate local buyers,” who aren’t willing to leave town altogether. “Vancouver is a lifestyle city,” said Macdonald’s Gregg Baker in a press release earlier this year. “It’s no secret that people like being here.”
Click here for local property listings
|
