February 1, 2016
Falling loonie fueling foreign interest in Vancouver real estate, say industry experts
Stability of Canadian real estate and the favourable exchange rate make Vancouver an attractive investment
Don't expect the economic head winds slowing Canada's economy to have the same effect on Vancouver's real estate market.
That was the message from a panel of developers at the Urban Development Institute's sold out industry event held January 21, 2016.
Jon Stovell, the president of
Reliance Properties told the crowd the free falling loonie has made the city
even more enticing to foreign buyers, and there is no forecasting where it will
"Our market's gone down a rabbit hole, you know. Up is down, down is up and the clocks are running backward … We're seeing records surpassed every day," said Stovell.
Investors are coming from all around the world to take advantage of the falling exchange rates, says Stovell, who cites the example of a German billionaire who was recently in town looking to buy a downtown Vancouver tower.
"Anybody who's got a lot of money to invest is probably working with a fair degree of American dollars," he said.
Other members of the panel highlighted the relative stability of Canadian real estate values when compared with more volatile investments such as stocks.
But it is not just
investors putting pressure on prices. Stovell says more and more
people want to move to Vancouver to live or vacation.
"People from Alberta are moving back here, and Americans are seeing Vancouver again. so it's really in the spotlight right now."
All that extra attention is bound to keep pushing prices skyward, he says.
So… What does this Mean for the Overall BC’s Real Estate Market???
Strong Housing Demand Forecast Through 2017
BCREA 2016 First Quarter Housing Forecast Update Vancouver, BC – January 28, 2016. The British Columbia Real Estate Association (BCREA) released its 2016 First Quarter Housing Forecast Update today.
Multiple Listing Service® (MLS®) residential sales in the province are forecast to edge back 6.2 per cent to 96,100 units this year, after reaching 102,517 units in 2015. Strong consumer demand is expected to push MLS® residential sales up by 2 per cent to 98,000 units in 2017.
Housing demand in the province is being supported by a relatively robust economy, leading to strong employment growth and rising wages. In addition, net interprovincial migration is on an upswing as many Albertans look to BC for job opportunities. BC home sales are forecast to remain well above the ten-year average of 83,200 units over the next two years.
"The inventory of homes for sale is now at its lowest level in almost a decade," said Cameron Muir, BCREA Chief Economist. "Fewer homes for sale and strong consumer demand are expected to push home prices higher in most BC regions this year and in 2017." The average MLS® residential price in the province is projected to increase 6.4 per cent to $677,200 this year and a further 4.1 per cent to $705,300 in 2017.
New home construction activity is expected to remain at elevated levels corresponding to strong consumer demand and relatively thin inventories, particularly on the South Coast. Total housing starts in the province are forecast to remain close to an annual pace of 30,000 units through 2017, which will be the strongest two year performance since the 2007-2008 period