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“Vancouver: Not as Expensive as You’d Think”?
It’s an unexpected title when we’ve been told time after time that Vancouver is one of the least affordable cities in the world for housing. Some economists and real estate watchers call our market a bubble.
So far, however, there’s no evidence of any price collapse. What keeps our so-called bubble from bursting?
In this recent article in Vancouver Magazine, real estate writer Jim Sutherland points out that thriving industries including construction and lumber, a wealth of natural resources, and strong local businesses are keeping the economy buoyant and helping to maintain the real estate market.
But the X factor is immigration. He traces the strong historical correlation between the number of immigrants to our area and home sales and prices. As immigrant landings rise and fall, so does the real estate in the Lower Mainland.
So if Vancouver is way up there among the least-affordable cities in the world for housing, why do so many new Canadians come here and buy real estate? Sutherland’s simple answer is that “to immigrants from Asia, real estate in Vancouver doesn’t seem expensive at all. In fact, it’s pretty cheap.”
He quotes a survey that calculates housing affordability for the world’s largest cities in over 100 countries. It puts Vancouver at only the 125th least-affordable city in the world, on a par with Amsterdam, Stockholm and Barcelona.
Compared to major Chinese cities such as Beijing, Shanghai or Shenzhen, suddenly Vancouver isn’t so expensive at all. Major world cities such as “Moscow, London, Paris, or Tokyo are up to twice as expensive.” When immigrants from these countries arrive, they see a spectacular, liveable city with reasonable (to them) pricing and a great quality of life.
Nobody’s saying that $1 million for a Vancouver special on the east side is affordable, just that on the global scale of expensive housing, we’re in the middle of the pack, not out in the lead.
Read the full article: “Vancouver: Not As Expensive As You’d Think”
© 2013 Real Estate Weekly
