Timing Of Supply Is Key As Demand Remains For Quality Homes
December 20th, 2010 01:08 PM
It’s habitual for the Vancouver housing market to be constantly reported on in the local and national press, and while information that helps buyers and sellers reach decisions is always welcomed, much of the recent comment has been a little sensationalist.
We are so used to seeing the type of headlines editors love about "property booms,” "mega million dollar condos" and then “boom and bust” and “how long can it last?” It’s only natural that we become a little unsure quite what’s happening next or who to believe.
Stable stats
Recent figures provided by the BCREA show that sales and prices for 2007 have risen in Vancouver’s housing markets at a moderate rate of around five to eight per cent. However increases are down from the stratospheric highs recorded in mid-2006. So is this the tipping point?
While numbers and forecasts provide a useful guide (when interpreted accurately!) my feeling is that it's not possible to understand property markets by simply delving into the numbers. A home is a place to live and a roof over our heads. Where we live has a bigger impact on our quality of life than any other expenditure. It follows that the behaviour of homeowners doesn't readily lend itself to desktop analysis by either academics or journalists.
What is important to consider is that the fundamental elements that underpin long term stability are still very much present: Canada has a strong economy, stable single figure interest rates, low unemployment and rising earnings. Add to that a B.C. population that continues to grow due to ever increasing migration and immigration.
A gentle easing of interest rates by the Bank of Canada to soften the strength of the dollar slightly, will without doubt be beneficial to the manufacturing industries and possibly add even more energy to our robust real estate market.
Led from the top
Operating here on the North Shore in such sought after communities, I have encountered high levels of demand right across the North Shore from motivated buyers from all over Canada, the U.S., Asia and the U.K. It is therefore no surprise that genuinely top quality homes still attract lively competition from discerning buyers despite in some instances, what appear to be very premium prices. However, more recently, some unrealistic sellers do seem to be struggling slightly to find enthusiastic buyers.
It is true nobody wants to pay more than they should in order to secure a home, However, there does seem to be general market sentiment that, to a certain extent, due to a scarcity of stock, an internationally recognised address in Vancouver, or on Vancouver’s North Shore -- somewhere with privacy, quality of lifestyle and a genuine sense of community -- has an underpinned future value. In a similar fashion to the market for fine art and antiques, it is the rare and exceptional commodities that over the long-term out-perform market trend.
The early bird
At this time of year it’s quite normal for buyers and sellers to consider their strategies. In the first instance the natural slowdown over the holiday season usually affects the sentiments of sellers as they wait for slightly more favourable conditions before putting their homes up for sale. Consequently supply of fresh stock to the housing market at the very beginning of the year decreases, which in turn increases the demand for each available property.
This seems to be exaggerated with the increase of international buyers and investors I have witnessed in the past 12 months, who never seem to stop looking. This is the ever shifting see-saw between supply and demand that either drives or restricts our housing market. Once the see-saw has passed the tipping point where the imbalance starts to favour the other side, market prices have to shift.
In this case, once there is more demand from buyers than supply from sellers, strong prices should prevail. However, with the coming of spring and the natural increase to the market of fresh housing stock, coupled with a possibility of fewer buyers from the U.S. and the U.K., prices may have to adjust to stay competitive.
In other words, it may just be “the early bird that catches the worm.” So if you are considering selling this year you might want consider getting in quickly to take advantage of the current imbalance.
Peter Townsend is a North Shore Realtor with Angell Hasman & Associates. www.peter-townsend.com 604-913-1122
Copyright North Shore Magazine Issue Feb - Mar 08
We are so used to seeing the type of headlines editors love about "property booms,” "mega million dollar condos" and then “boom and bust” and “how long can it last?” It’s only natural that we become a little unsure quite what’s happening next or who to believe.
Stable stats
Recent figures provided by the BCREA show that sales and prices for 2007 have risen in Vancouver’s housing markets at a moderate rate of around five to eight per cent. However increases are down from the stratospheric highs recorded in mid-2006. So is this the tipping point?
While numbers and forecasts provide a useful guide (when interpreted accurately!) my feeling is that it's not possible to understand property markets by simply delving into the numbers. A home is a place to live and a roof over our heads. Where we live has a bigger impact on our quality of life than any other expenditure. It follows that the behaviour of homeowners doesn't readily lend itself to desktop analysis by either academics or journalists.
What is important to consider is that the fundamental elements that underpin long term stability are still very much present: Canada has a strong economy, stable single figure interest rates, low unemployment and rising earnings. Add to that a B.C. population that continues to grow due to ever increasing migration and immigration.
A gentle easing of interest rates by the Bank of Canada to soften the strength of the dollar slightly, will without doubt be beneficial to the manufacturing industries and possibly add even more energy to our robust real estate market.
Led from the top
Operating here on the North Shore in such sought after communities, I have encountered high levels of demand right across the North Shore from motivated buyers from all over Canada, the U.S., Asia and the U.K. It is therefore no surprise that genuinely top quality homes still attract lively competition from discerning buyers despite in some instances, what appear to be very premium prices. However, more recently, some unrealistic sellers do seem to be struggling slightly to find enthusiastic buyers.
It is true nobody wants to pay more than they should in order to secure a home, However, there does seem to be general market sentiment that, to a certain extent, due to a scarcity of stock, an internationally recognised address in Vancouver, or on Vancouver’s North Shore -- somewhere with privacy, quality of lifestyle and a genuine sense of community -- has an underpinned future value. In a similar fashion to the market for fine art and antiques, it is the rare and exceptional commodities that over the long-term out-perform market trend.
The early bird
At this time of year it’s quite normal for buyers and sellers to consider their strategies. In the first instance the natural slowdown over the holiday season usually affects the sentiments of sellers as they wait for slightly more favourable conditions before putting their homes up for sale. Consequently supply of fresh stock to the housing market at the very beginning of the year decreases, which in turn increases the demand for each available property.
This seems to be exaggerated with the increase of international buyers and investors I have witnessed in the past 12 months, who never seem to stop looking. This is the ever shifting see-saw between supply and demand that either drives or restricts our housing market. Once the see-saw has passed the tipping point where the imbalance starts to favour the other side, market prices have to shift.
In this case, once there is more demand from buyers than supply from sellers, strong prices should prevail. However, with the coming of spring and the natural increase to the market of fresh housing stock, coupled with a possibility of fewer buyers from the U.S. and the U.K., prices may have to adjust to stay competitive.
In other words, it may just be “the early bird that catches the worm.” So if you are considering selling this year you might want consider getting in quickly to take advantage of the current imbalance.
Peter Townsend is a North Shore Realtor with Angell Hasman & Associates. www.peter-townsend.com 604-913-1122
Copyright North Shore Magazine Issue Feb - Mar 08
