The Chinese homebuyers account for nearly one-third of Vancouver’s real estate market. But the market remains unaffordable for locals. This article will examine the reasons why prices are so high and what the future holds for the market. Before we get into specifics, let’s explore some of the most popular topics in Vancouver real estate.
Chinese homebuyers accounted for nearly one-third of Vancouver’s real estate market
The real estate market in Vancouver is hot, and China is one of the fastest growing foreign investors. In 2015, Chinese buyers accounted for nearly one-third of the city’s home sales. In 2016, Vancouver officials imposed a 15% foreign buyers tax. Chinese investors moved to other cities in Canada, such as Toronto, where home prices soared.
Mainland Chinese homebuyers are primarily purchasing houses in Vancouver’s western neighborhoods, such as Point Grey, Shaughnessy and Dunbar. Some of these properties are even in close proximity to universities such as UBC.
Interest rates and inflationary trends depressing market
Vancouver real estate prices are under pressure as interest rates and inflationary trends continue to rise. The recent overnight rate increase could make mortgages more difficult for first-time buyers. This Sam Heller East Vancouver Real Estate could moderate home prices in Metro Vancouver, but the effect has yet to be determined. It’s crucial for first-time buyers to remain cautious before making a purchase. If they rush into the market at the peak, they may find themselves priced out of the market.
The fall market is typically the second strongest time of the year. However, sales have fallen by almost 40% in both Vancouver and the GTA in recent months. As a result, prices will be lower by 2022. When sellers are forced to sell, they will continue to discount their prices until they can get a good deal. This means that the floor will keep dropping until prices are at their lowest point.
Prices remain unaffordable for locals
The real estate market in British Columbia has become unaffordable for the average person. Rising property prices have priced out would-be home buyers and renters, while creating wealth for home owners and investors. This has been made possible by the province’s low property taxes, principal residence capital gains tax exemption, and homeowner grant. To combat this, local leaders need to adopt tax policies that discourage speculative investment in residential property.
In the past few years, housing prices have been rising faster than wages in Metro Vancouver. This has resulted in a flight of locals. As a result, many young people have left the city. Millennials and other professionals are emigrating to more affordable cities.
Future of market
The future of the real estate market in Vancouver is not as bright as you might think. Millennials, the generation born between 1980 and 2000, are entering prime buying age. Currently, only a third of millennials own a home, but 80 percent of them plan to purchase a home in the next five years. While most of these young adults currently rent or live with their parents, they are expected to become a major force in the Vancouver real estate market over the next few years.
According to a leading Vancouver real estate expert, the real estate market is about to enter a downturn that could last as long as two years. Rising interest rates will negatively impact the housing sector, so a slower housing market will likely lead to lower Vancouver real estate prices. In April 2022, the benchmark price for homes in the Greater Vancouver area was $2,312,000, down $110,000 from the same month last year. In April, the Real Estate Board of Greater Vancouver reported a decrease of 42 percent in single-family home sales.