August 21, 2013
Strong and Steady
Confidence has returned to the Metro Vancouver real estate market and moderate price increases are expected over the next year.
After a year of anxious waiting and watching, Metro Vancouver homebuyers and sellers can rest easy and count on steady sales and moderate price increases over the next 12 months. That’s the word from an assortment of seasoned developers and marketers whose livelihood depends on accurately predicting what’s in store for local real estate markets. Their forecasts align with Canada Mortgage and Housing Corp. predictions, which call for stable markets through this year and modest increases in home sales and prices in 2014.
George Wong, founder of Magnum Projects, says sales have picked up considerably in the last six months, as markets return to a healthier state than last year, when buyers and sellers – uncertain about economic news – stood on the sidelines. “I think the main reason was all that unfavourable news from the last six to 12 months in 2012 frightened a lot of people from entering the market,” says Wong. “The fiscal cliff in the U.S., the Spanish crisis, the Greek crisis, the Italian crisis and the mortgage amortization rules changing were just a few reasons. In general, people were saying it was not the right time to buy.”
Now that pent-up demand is being released, says Wong, whose real estate marketing firm has sold more than 6,800 homes since 1991. “People see that the Vancouver market is strong and that it is not going to crash as some people have said. That has instilled a lot of confidence in the market.”
Michael Ferreira, managing principal of Urban Analytics, a Vancouver real estate consulting firm, says he expects steady sales and steady prices in the next 12 months. “What we have seen so far this year will continue. There is not a lot of urgency in the market, and steady sales are being driven by end-use buyers rather than investors.”
Ferreira also says the nature of real estate marketing is changing, with firms devoting a lot of time to pre-registering potential buyers and then contacting them prior to official development openings. He says such approaches are good for consumers, who often get a better pick of properties that way. One thing developers and marketers that serve them have learned about the Metro Vancouver market during the last few years is it is affected more by outside influences than ever before, including the utterances of central bankers, the economic situation in Europe and immigration from China, he said.
Cameron McNeill, whose firm Mac Marketing Solutions has 15 projects on the go and more coming this fall, is bullish on Metro Vancouver’s real estate market. He says his advice has always been to ignore the doomsayers who predict the popping of the so-called Vancouver real estate bubble. “There are three things we talk about in Vancouver: the weather, the Canucks and real estate,” said McNeill. “There are always people speculating about the ups and downs of the market and I’ve always told people to ignore that speculation. Look forward in three- to five- to seven-year timelines, and then you can buy with confidence.
“Let your concerns about what you need and want guide you rather than trying to time the bottom or top of the market,” he says. “Over the last few years, I have seen more people expressing remorse and regret over not selling or buying, rather than over going ahead.” Like Ferreira, McNeill sees immigration as an influence and he doesn’t see in-migration letting up any time soon. “We do not have a supply bubble and we did not have a supply bubble last fall, when people were fearful and waiting and watching. But it didn’t mean that they were disappearing and moving out of the city or not wanting to put a roof over their head.
“This country is built on immigration. For people to think that it is going to stop is ridiculous.” l