The real estate firm tabled a report based on the Bank of Canada’s housing outlook released this year in which BoC governor Stephen Poloz warned that Canada’s housing market is overvalued by 30 per cent.
Despite the warning from Poloz, the Re/Max reports suggest that the Greater Vancouver area is well supported by a variety of supply and demand factors, including Chinese investors and a wave of immigrants looking for opportunities.
“Off-shore buyer demand from Mainland China continued throughout the year while activity for detached houses was strong,” the report notes.
“Some properties are still attracting multiple offers and selling for above the list price, which is a sign of continued buyer demand.”
Re/Max’s report also notes that the average residential prices in Greater Vancouver increased from $781,517 in 2013 to $838,400, and are projected to rise to $863,600 in 2015.
And there are no signs of a slowdown on price gains, according to the report.
“In 2015, Re/Max expects that there will continue to be upward pressure on detached house prices in the Westside due to high demand and low inventory,” the report notes.
Buyers who hoped to break into Vancouver’s market on the east side and lost multiple bid battles may drop out of the market in 2015, the report notes but frustrated buyers won’t limit the market, though, because “the pipeline of demand for the region will continue to grow.”
There has long been speculation that the flood of cash pouring from foreign countries like China into B.C., namely Vancouver, will be limited with the ending this year after the federal immigrant investor program is coming to an end soon.
However, the reports cites young families and downsizers as those who will drive demand if foreign investment begins to slip in 2015.
“Across Vancouver, young families and equity downsizers will drive demand,” said the report.
“Buyers who cannot afford detached Westside homes will take advantage of the relative affordability of townhouse living. Demand for Westside homes will continue to be driven by off-shore buyers who can afford to pay the two million dollar-plus price tag.”
Housing prices in Vancouver will rise more than three per cent in 2014 as foreign investment continues to spur demand in Canada’s most expensive city and the Lower Mainland area, according to a recent Re/Max report.