Vancouver is now a housing bubble and should perhaps be aproached carefully. Certainly normal metrics, like the ratio of average price to income, are extraordinarily high and could well be in danger territory.
Housing markets in Vancouver are not aligned in with any economic logic. Some say that Vancouver remains a balanced market, however I find it different. The Conference Board's Metro Resale Index shows that Vancouver remains a balanced market. Since neither buyers nor sellers should have bargaining advantage under these conditions, prices should grow near their trend rate.
But the average resale price was up more than 20 per cent from a year earlier in both May and June, the latest in a six-month string of double-digit price hikes, and well above the six-percent long-term trend of price growth.
Sales have recovered from a dip in 2010, but are easing gently. This has steadily eroded the sales-to-listings ratio. With few signs that the market is going to cool significantly, there is chatter that Vancouver's housing market is a bubble waiting to pop.
Yet, the situation facing homebuyers seems somewhat less dire than at first glance. Vancouver's average resale price has been skewed upward by trading of expensive units in tiny neighbourhoods and by a modest shift toward single-detached homes that carry higher price tags. Those seeking shelter, both physically and from high prices, can still find relatively affordable units and decent bargaining conditions if they are careful, knowledgeable, flexible and ready to shop around.
Vancouver's housing market certainly is top-heavy. The clearest signal is a widening difference between Vancouver's average price, which exceeds $800,000, and its median price, which was below $600,000 during the first quarter of 2011.
Why the significant gap between the average and median price? Segments - and regions - of Vancouver's housing market are boosting the average price. Single-detached units, which are higher priced, are taking a bigger bite of the market. Singles have a relatively high sales-to-active listings ratio and strong price increases. The expensive West Vancouver district is also gaining market share - its first quarter sales-to-active listings ratio was at a four-year high, and prices are rising robustly.
During this lucky time for home sellers where an investment migration from Chinese buyers fleeing their country with desperate attempts to land their liquid cash in Vancouver's properties, mainly located in the West End and West Vancouver has obviously spiked the market prices. Thus leaving many homeonewes over joyed from the profits atained in selling their properties to foreign buyers. This purchasing flood has been seen as a one time only basis, as China continues to cap and restrict any further Chinese fleeing with interest to purchase or move large amounts of cash and has left Canadians with a curious question or more likely a dilema, "are we Canadians capable of purchasing at these highe prices in the next couple years to come?
Housing markets in Vancouver are not aligned in with any economic logic. Some say that Vancouver remains a balanced market, however I find it different. The Conference Board's Metro Resale Index shows that Vancouver remains a balanced market. Since neither buyers nor sellers should have bargaining advantage under these conditions, prices should grow near their trend rate.
But the average resale price was up more than 20 per cent from a year earlier in both May and June, the latest in a six-month string of double-digit price hikes, and well above the six-percent long-term trend of price growth.
Sales have recovered from a dip in 2010, but are easing gently. This has steadily eroded the sales-to-listings ratio. With few signs that the market is going to cool significantly, there is chatter that Vancouver's housing market is a bubble waiting to pop.
Yet, the situation facing homebuyers seems somewhat less dire than at first glance. Vancouver's average resale price has been skewed upward by trading of expensive units in tiny neighbourhoods and by a modest shift toward single-detached homes that carry higher price tags. Those seeking shelter, both physically and from high prices, can still find relatively affordable units and decent bargaining conditions if they are careful, knowledgeable, flexible and ready to shop around.
Vancouver's housing market certainly is top-heavy. The clearest signal is a widening difference between Vancouver's average price, which exceeds $800,000, and its median price, which was below $600,000 during the first quarter of 2011.
Why the significant gap between the average and median price? Segments - and regions - of Vancouver's housing market are boosting the average price. Single-detached units, which are higher priced, are taking a bigger bite of the market. Singles have a relatively high sales-to-active listings ratio and strong price increases. The expensive West Vancouver district is also gaining market share - its first quarter sales-to-active listings ratio was at a four-year high, and prices are rising robustly.
During this lucky time for home sellers where an investment migration from Chinese buyers fleeing their country with desperate attempts to land their liquid cash in Vancouver's properties, mainly located in the West End and West Vancouver has obviously spiked the market prices. Thus leaving many homeonewes over joyed from the profits atained in selling their properties to foreign buyers. This purchasing flood has been seen as a one time only basis, as China continues to cap and restrict any further Chinese fleeing with interest to purchase or move large amounts of cash and has left Canadians with a curious question or more likely a dilema, "are we Canadians capable of purchasing at these highe prices in the next couple years to come?