Downsizers are playing a key role in B.C.’s still-strong real estate outlook
Those frenzied days in Vancouver when people would line up around the block at dawn to buy a condo, or a humongous highrise would sell out in a weekend are long gone. Replacing those frantic times for the foreseeable future is a much calmer but still brisk business where investors have been outnumbered by downsizers, first-time buyers and immigrants, says one of Vancouver real estate’s crystal-ball gazers.
Michael Ferreira, managing principal of the research firm, Urban Analytics, says downsizers play no small role in today’s market, by moving out of their single family homes and redistributing their wealth to their kids. “They are selling their $2.5 million house and moving into a $1.3 million condo and have money left over to help their kids finance the down-payment of a home.”
The average price of a home in B.C. is expected to go up by $5,000 this year
Canada Housing and Mortgage Corp. statistics support predictions that the strong and steady housing market will continue this year. Single-family housing starts in B.C. are slated to hit 9,100 units this year, up from 8,522 last year; multiple unit starts will rise to 18,700 units from 18,532; existing home/MLS sales will increase to 76,000 from 73,936, and the average price of a home in B.C. will go up by $5,000 to $542,500.
Ferreira, who has studied real estate markets for the last 22 years, says the biggest change in the last three years is greater demand from end-use buyers rather than investors. “People have this perception that there are all these wealthy immigrants coming in and buying up all our expensive real estate. There is certainly some of that but we are also seeing immigrants buying throughout the market. We are seeing Chinese buyers in the Fleetwood and Guildford areas of Surrey.”
Another trend he says condo sellers have noticed is families buying two smaller units and combining them into one, denoting a change in people’s tastes in housing. Cameron McNeill, president and CEO of Mac Marketing Systems, agrees the real estate market has changed over the last year. “We are seeing not just investors at the table, but a deeper, broader market. We are seeing homeowners and first-time buyers, and downsizers moving out of houses into condominiums,” he said.
But if the players have changed the pace has not. “We just opened a Cressey project called Cadence in Richmond, where we sold 70 suites out of 200 even before the project went public,” said McNeil. In the next six months we will see the strongest markets, with price increases of up to five per cent, on Vancouver’s eastside and westside, in Richmond and in Coquitlam, he said.
“We are not in the days of the last decade where we would have sold a project in a weekend but we are in an extremely healthy market.”
Real Estate by Michael Bernard