Spring 2010 Market Update
The contrast between the condo market Downtown and the house market on the Westside right now is probably as great as I have seen at any time in the past 10 years. The demand for single family homes and the land on which they stand is extremely high. Bidding wars are commonplace, especially for homes under $2,000,000. Local families who can keep pace with the prices are still keen to participate, but the driving force among buyers is families from Mainland China. The convenience and the quality of life on the Westside (parks, beaches, proximity to Downtown, safe streets and most especially schools) makes it a huge draw. Popular purchases are either brand new or nearly new homes in particular school catchment areas. However possibly even more desirable are much older homes on good building lots. If these homes are essentially land value but livable for a few years, with the potential to build a family’s dream home in the future, then expect to see the sale price exceeding the list price by anywhere from $100,000-$500,000. Unlike the condo market, a rise in mortgage rates is unlikely to be a huge factor so I would expect this market to continue for some time leading to significant increases in value especially for larger lots.
As predicted in my last newsletter, things have started well again in 2010 with a well balanced market providing strong sales volume and stable prices. Sales activity was probably slightly higher than expected during the Olympic weeks themselves and then in March the number of listings started to grow. This is to be fully expected a) at this time of year and b) given that less came to market in February because of the festivities. In the City of Vancouver as a whole, the market remains well balanced with demand keeping pace with supply. However, in the Downtown core, especially in the more generic high rise towers, things do appear to be changing slightly. Some investors are now leaving the market due to lower rental returns and a perceived lack of major capital appreciation that might follow in the next couple of years. First time buyers are willing to jump in and replace them but not necessarily in huge numbers and certainly not unless the prices are realistic, especially with the threat of further rises in mortgage/interest rates. Therefore to protect your investment, if you are considering buying, I would look at product that is in limited supply – view property, lofts, warehouse conversions, those with large decks or especially popular buildings.