Homes have already skyrocketed in price in Vancouver, rising over 20 percent in 2021. Between 2019 and 2021, homes in the Greater Vancouver area increased by nearly 74 percent. The benchmark price is now over 1.8 million, and in 2022, there won’t be much relief.
Property values will continue to rise, although we’re unlikely to see more record highs. So, what’s behind it all?
Lack of Inventor
Starting out the year with only 5,000 homes listed on the market across Greater Vancouver, it’s the lowest level seen in over 30 years. With the record-level demand, rising prices won’t relent until the housing supply improves. If you’re thinking about selling and moving to a less expensive area to reap the profits, now is a good time to put your property on the market among the Vancouver homes for sale.
The chronic shortage of housing supply and steadily decreasing inventory levels will continue to be the main driver of price appreciation in the city and the Greater Vancouver area.
Immigration
Despite many people moving to more suburban areas, the population in Vancouver is expected to continue to rise. Overall, Canada experienced the highest immigration levels for any quarter since 1946 between July and September of 2021, with 122,748 immigrants compared to 40,116 in the third quarter of 2020.
That’s a trend that isn’t changing, and with the increase of people in need of a home combined with limited new construction and no increase in listings, that puts even greater pressure on prices, rising home values.
Foreign Investors
Throughout Canada, the market is being driven by something other than owner-occupiers. It isn’t just the new immigrants arriving, but foreign investors. They arrive with great wealth while continuing to earn high incomes outside of the country.
Data backs up assertions by experts, with nearly nine out of 10 newcomers over the past two decades born outside of Canada, primarily in Asian countries. Between 2017 and 2019, 63.5 percent of Canadian arrivals were born in Asia. Many new property owners are foreigners who invest while working offshore, otherwise known as “circulatory migrants.” While some argue they’re only investing in luxury properties and don’t impact middle-class neighborhoods or home prices, that’s not the reality.
Technology
Another contributing factor to the rising home prices and property values is technology. There’s no longer a need to even step foot into Canada to purchase some of the most exclusive real estate in the lower mainland of B.C.
As a standard practice new sales listings entered into the MLS aren’t made available to the public for up to 72 hours depending on the province, but there have been reports that foreign websites have been pulling that information ahead of time. When those details are available to just a segment of the open market, there are concerns that foreign buyers are getting an unfair jump on the new listings.
Desirability
Of course, if Vancouver wasn’t a desirable place to live, it’s unlikely that property values would be rising so dramatically. It’s frequently ranked among the world’s most livable cities, with jobs plentiful and the location incredibly scenic, surrounded by the mountains and the sea. Vancouver is internationally renowned for its natural beauty and opportunities for outdoor adventure.