Vancouver real estate prices have reached their highest levels since the start of the recession and a strong market for luxury home purchases is fuelling a wave of buying in the city, as the national economy recovers.
The city is set to see the biggest spike in home sales since 2008 with sales forecast to hit their highest level in two decades.
Home sales rose to a record of 1,854,000 units in the first three months of 2017, according to a new report by the Real Estate Board of Greater Vancouver.
The national sales volume was also at record highs, surpassing 1.26 million units for the first time in 10 years.
The growth in sales is being driven by a surge in interest from investors, as investors look to invest in property, said Jefferies chief economist Jeff Gannon.
The real estate market has been driven by strong demand from overseas investors, who are now buying properties to sell as they come off a year of record-breaking home prices.
“It’s very, very strong,” he said.
“I would call it an oversupply in the market.
It’s just so strong and the demand for property is just extraordinary.”
The national market has also seen a big increase in the number of foreign buyers.
In Vancouver, the average number of purchases by Chinese buyers is now over four times higher than the national average, the report found.
This year, Chinese buyers accounted for 15.9 per cent of all new Vancouver homes, a five-fold increase from the year before.
It’s not just the Chinese buying a slice of the market that is driving up home prices in the region.
A lot of buyers are also flocking to Vancouver as their governments tighten mortgage regulations and demand for properties increases.
This includes Chinese nationals from overseas who are buying up Vancouver realty.
The number of Chinese nationals buying Vancouver properties is increasing every year.
“The demand for housing is growing in Vancouver, which is an interesting phenomenon,” said Jeff Garton, the real estate board’s chief economist.
“And so the demand has really gone from China to Vancouver and from there to Canada.”
Gannon said there are two different types of foreign buyer that are taking advantage of Vancouver’s booming housing market.
“There’s a large group of people who are very comfortable in the U.S., who are interested in Vancouver as a place to live, and they want to get into the Canadian market,” he explained.
“Then there’s a smaller group of folks that want to buy here and they’re looking to do so for financial reasons, as well.”
According to the report, Chinese nationals are spending about three times more on Vancouver realtor services than they did in 2016.
“So the question is: is the demand still there?
Or is there something that’s changed in the marketplace?”
We think it’s the latter.
“Vancouver realtor Jason Leung said there is a lot of demand for the luxury properties being offered by local buyers.”
We’re seeing a lot more foreign buyers come into the market,” said Leung.”
They want to be in the luxury market.
They want to have access to the services, and we’re seeing it across the board.
“Vancity Real Estate Association executive director Andrew Chan said Vancouver is a great place to buy a home and a place for people to invest.”
You’re seeing more Chinese people in the realtor business,” he added.”
Vancouver is the only city in the country that has the opportunity to attract that kind of interest and the luxury, the luxury property market is very exciting.
“The realtor industry has also been hit hard by the impact of the provincial government’s tightening mortgage restrictions.
The province has also imposed a cap on the number that can apply for a mortgage loan, which has pushed up the cost of buying a home.
The Real Estate Institute of British Columbia said a large percentage of those who can afford to buy are not getting loans because of the caps.
The report found that one in five Canadians is now struggling to afford to live in the Vancouver region, which includes Vancouver, Surrey and Burnaby.