Monday, May 12, 2008

Vancouver Property Prices Still Rising!

Hi All,

I have been speaking to alot of people concerned that the real estate market in Vancouver has hit the peak and that the end is nigh. This is not the case.

For quite a while I have been saying that growth in prices will slowly decline, but there will not be a sharp correction. Vancouver's economy and real estate market is benefiting from low inflation, high demand for our natural resources in Asia, and falling interest rates designed to benefit Central Canada's ailing manufacturing sector.

I'd love to hear your thoughts!

New home prices show signs market is cooling

Globe and Mail Update

Ottawa — Prices for new homes in Canada rose 0.2 per cent in March from a month earlier, and 6.1 per cent over the past year, Statistics Canada says.

The month-over-month increase was exactly as economists had predicted.

And the 6.1 per cent year-over-year increase, slightly slower than the 6.2 per cent rise noted in February, also vindicated expectations that housing prices in Canada are no longer rising quickly.

“This deceleration continues a downward trend that started in September, 2006, due mainly to the softening market in Alberta,” Statscan said.

The hottest market in the country, for the 11th straight month, was Saskatoon, where prices for new homes have soared 46.2 per cent from a year ago. That's down from the record-setting 58.3 per cent seen in February.

On the month, Saskatoon prices rose 2.1 per cent.

Regina's new homes rose 27.8 per cent from a year ago, and 1.7 per cent between February and March.

“Saskatchewan is breaking away [from trends in other provinces] as its natural resource sector grows substantially larger and the province increases its efforts to attract migrants to the region to help alleviate the labour shortages,” economists at Bank of Nova Scotia explain.

Builders in Saskatoon, Regina and Winnipeg – where prices rose 15.0 per cent from a year ago – said they raised their prices because of higher material and labour costs, and also because of a strong market and high demand for new homes.

Nova Scotia also saw large price increases in March, with Halifax registering a 12.8 per cent increase from a year ago, because of a strengthening economy, rising costs and healthy demand.

Not so in other markets. Edmonton and Calgary are experiencing slower market conditions, and builders in those cities said they were lowering their prices to stimulate sales. Edmonton new housing prices fell for the third consecutive month, declining 1.1 per cent between February and March.

In Vancouver, prices rose 6.1 per cent from a year ago, while Victoria saw a 1.2 per cent rise year over year.

In Windsor, Ont., where the deterioration of manufacturing has hit hard, home prices dropped 0.6 per cent from a year ago. Generally, prices in Ontario and Quebec were not rising as fast as the national average.

New housing prices are an important contributor to Canada's consumer price index, and a deceleration of the new housing price index will help keep inflation low in Canada, economists say.


Vancouver realtor said...

Mike I think exactly the same like you and I agree also with a reasons you’ve stated. Working as a Vancouver real estate I can also confirm this on the figures I’ve recorded during last months. I think that despite the “crisis” is purchasing power still growing in Vancouver.

Mike Stewart an Downtown Vancouver Realtor with Century 21 In Town Realty said...

Hi Jay,

Thanks for your comments!

I am finding that the Spring market is here and that I am very busy. There are still lots of buyers and people can afford to buy.

We are not seeing the price increases we have seen during the 2002-2006 period, but prices are still rising.

I am finding the market is better for buyers as sellers are being more flexible.

I'd love to hear more comments!