Vancouver Housing Market Update – April 2008

April 12, 2008

A just released CMHC report by Market Analyst, Richard Sam, the housing market for Greater Vancouver area is expected to gradually move to a more balance market. The major factors affecting the housing market are economic and demographic growth fueling the sale of resale and new homes.

Domination by Multi-family Construction

Multiple family new construction and sale of multi-family homes currently dominate the housing market activities and account for over 60% of the market share. This trend will continue into 2009 and beyond as such these type of housing is more affordable to the average home buyers.

Low Interest Trend

Low mortgage rates and healthy employment growth are fueling the demand for housing by first time home buyers. Most first time home buyers are taking up longer amortization periods of 30, 35 or 40 years instead of the traditional 25 to get into the housing market.

Moving Up Market

Repeat buyers account for around 60% of the sale activities, and about 57% of these transactions are by home owners trading up market and around 35% of them are down sizing. The “sales to active listings ratio” is trending towards are more balanced housing market for 2008.

Pricing Trend And Growth Forecast

The double digit growth and price gain are behind us. The price gain for 2008 and 2009 are projected to be more moderate at 8% and 5% respectively. The report concluded that Greater Vancouver economy will to grow moderately and the demand for housing will be stable. Sales of resale and new homes will be moderate with price growth to slow.
New construction especially for multi-family will be stable, but at historically high level. You can read the full report here.

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