Tuesday, February 15, 2011
Supply and Demand
Vancouver continues to be one of the most interesting case studies in North America for Real Estate activity. Predictions abound about the vulnerability of the Vancouver market. Many call the hot market, "a bubble", but from where I stand, I don't see Russia...only the horizon.
The unique Vancouver combination of being the primary Pacific port in Canada, locked into a narrow crease of land between mountains and waterways, and being the most temperate climate in the country make it a compelling location for migrants. In deed many point to the "investor class" migrants who see Vancouver as a destination of choice in Canada as being a primary factor in rising house prices. This is just one factor among many for the climbing sticker price on Vancouver properties.
A year ago Vancouver was the host city to the Winter Olympics. This cast a concentrated focus on this mountain city by the sea. Not surprisingly since then, prices have continued to climb. Some neighbourhoods have seen double digit growth in already comparatively high prices. The Vancouver westside neighbourhood has some of the most expensive "dirt" in the country. Builders and investors look to purchase lots in some of the more mature neighbourhoods in the hope of tearing down the older home and building a newer luxury class dwelling. The problem continues to be that demand outpaces supply.
Multiple offers and bidding wars continue to push prices skyward. As long as affordability remains in reach, Vancouver will continue to demand the highest property values in Canada. Scarcity of supply that meets an overabundance of demand is always the recipe for accelerated prices. That fact doesn't appear to change anytime soon in Vancouver. Not surprising...given that this is best place on earth!