The Vancouver real estate market continues to grow unabated, with the demand for single family homes particularly strong, according to a new report released Thursday by Sotheby's International Realty Canada.
The luxury market (defined as properties sold for more than $4 million) is seeing sales growth of 50 per cent, year over year, president and CEO Ross McCredie told The Huffington Post B.C.
The statistics belie recurring talk of a housing bubble about to pop, McCredie says, with international "so-called experts" not understanding the very particular Vancouver market.
"In the last couple of years, we’ve had a lot of clients come to us and say, 'Jeez, the Vancouver market is over-inflated. I want to sell my home and when the market corrects I’ll jump back into the market,'" McCredie says. "And that’s a scary proposition, because if you want to stay in the market and time the market, it’s a difficult thing to do.
"The so-called experts have been wrong for about seven years straight," he notes. "Anybody who jumped out of the market at any point in the last couple of years, can’t get in any cheaper than when they sold; in fact, it’s gone up on them."
The market for single family homes is the big news here, says McCredie, with the fall 2012 slump attributed to speculation that B.C. would see a change in government in last year's provincial election. Now that uncertainty has passed, the prospect of continued low interest rates, continued foreign investment and the potential from industrial growth such as liquefied natural gas (LNG), leaves him confident that demand will continue to grow significantly.
On the city's west side, the single family home in the above $4-million range continues to be sought after by a large number of mainland Chinese buyers, he said.
"These are second or third generation mainland Chinese buyers, they are not new to the market," McCredie adds. " I think there's a misconception — especially in the residential side — that people are coming off a plane and buying real estate. That’s not what’s happening.
"What they are doing is buying more property as their families are expanding. They’ve been here 10, 15, 20 years and they are still making the majority of their money potentially in China or elsewhere in the world, but their families are here and they have been educated here."
And, while the east side has yet to see prices spike that high, McCredie says it will happen, with the Main Street neighbourhood and surroundings naturally suited to today's urban buyer unwilling to accommodate a lengthy commute into their lives.
"When you’ve lived here for a while, you look at the market somewhat differently to someone who just arrived, whether you’re an immigrant or investor," McCredie explains. "When they look at Vancouver and they see the east side being Main Street or close by, they see excellent neighbourhoods with great single family homes with views, good proximity to downtown and with the airport incredibly close.
"If you look at that in the context of other cities throughout North America, or even globally, that’s a natural market we see is going to continue to strengthen, rather than people going the suburban route to Richmond or White Rock."
McCredie says that the current desire for city-living over the suburbs is evident in Toronto's traditional CEO commuter community of Oakville, where the luxury market has weakened as people fed up with the traffic, and baby boomers ready to be back in the city, have moved out.
While he is bullish on the prospects for single family homes in Vancouver, he says the condo market is a different case. Constant development in the downtown core, and the city's continued push for density along the Cambie and Broadway corridors means that supply is not an issue and, consequently, no major escalation in prices is expected.
"Affordability is important," he notes. "They’re definitely not cheap condos but they aren’t out of people’s reach – that’s where we’re going."
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