Tue Mar 18, 2014 7:28am PST
Sotheby’s International Realty Canada (SIRC) expects both sales and prices to rise in the Vancouver real estate market this spring, according to a report that the real estate firm released March 18.
Metro Vancouver home sales have been consistently below the 10-year average for each month in the past year, according to Real Estate Board of Greater Vancouver (REBGV) statistics. SIRC expects that trend to end and for sales to be in line with 10-year averages starting this spring.
“We will also continue to see a 3% to 5% increase in prices,” SIRC CEO Ross McCredie told Business in Vancouver.
The REBGV pegged the benchmark home price for the region to be $609,100 in February, or 3.2% above what it was in February, 2012.
“Compared with a year ago at this time, we were wondering what would happen with the election and everything else. Since then, there’s been a lot of positives coming out of the Vancouver marketplace,” McCredie said.
He dismissed both the impact of federal government scrapping the immigrant investor program, which was popular with wealthier Asian immigrants, and Canada Mortgage and Housing Corp. (CMHC) raising the rates it charges to insure mortgage loans by an average of 15% starting May 1.
“The No. 1 contributor to buying property right now is that interest rates are incredibly low,” McCredie said. “Even if they go up two or three percentage points, they’re low by historical standards.”
He expects the migration from rural areas into cities to continue across the country and for new immigrants to also favour cities.
The lower Canadian dollar has also had the impact of encouraging Canadians interested in investment property to buy in Canada instead of in the U.S., where properties in so-called “sand states” such as California, Nevada and Arizona have been rising.
“The last factor that has really impacted the Vancouver marketplace is the impact of the transfer of wealth,” McCredie said. “There are a significant number of Canadians who are either recipients of an inheritance or are children in families where the parents have decided to help their kids out in buying real estate.”