Vancouver has spent the past decade as one of the world’s hottest real estate markets. Prices have skyrocketed at astronomical rates, and it’s become one of the most expensive places on Earth to buy a house. Paying a million dollars for a perfectly average 2 to 3 bedroom detached house in an middle-class area has become the norm. Even $500,000 for a tiny apartment is now normal. This exceeds anywhere else in Canada, even Toronto.
It has been pegged as a bubble for the past few years. Repeatedly, experts and armchair experts alike have cited Vancouver’s real estate prices as unsustainable. Crashes have been predicted in every month of the past few years by someone somewhere, but alas, they continued to rise.
But no longer. The past few months, Vancouver’s real estate prices seemed to hit a roof. For the first time in what seems like forever, Vancouver’s real estate prices stood still.
So What Comes Next?
The next event is a complete mystery, and predictions are all over the place. Some insist that real estate in Vancouver simply hit a small rut, and it will continue it’s illogical climb soon. Others however, have much gloomier predictions. Predictions that the bubble will pop have come alive, and are stronger than anytime in recent memory. Many believe that a massive crash is inevitable, and that this is it.
However, in between these extremes there are a large number of people that propose a more moderate theory. They say that the climb is over, but it will not be followed by a earth-shattering crash that some predict, but instead either a slow decline or a plateau (depending on who you ask). If there is one thing that Vancouver’s real estate market has taught us over the past few years, it’s that only time will tell.
What’s Been Driving The Insane Price Climb?
There are a lot of proposed explanations for this. One of them is simply the rise of Vancouver as a city popular worldwide, but especially among the wealthy and elite. While this is certainly a factor, it alone cannot be the cause.
The most accepted explanation is that wealthy overseas buyers (Chinese buyers in particular) have been swallowing up real estate at absurd rates. This is also most certainly a factor. However, many others believe that the situation is significantly more complex than this. Whatever the root causes are, they are almost certainly not sustainable. What we don’t know though, is what the effect of this will be. Will it result in a slow decline, will prices hit their roof and plateau, or will it all come crashing down? Only time will tell.…