The most expensive housing market in North America? Because we’ve heard it so often, most Vancouverites are well aware that the answer is our own city. Others however, may not find the question so simple.
We know that by traditional measures, such as comparing our incomes to what we pay for housing, the Vancouver market is deemed to be 20-30% “over-valued” … but as James Surowiecki wrote recently in The New Yorker magazine, it seems the Vancouver market may now be priced according to more global parameters. Our real estate market has been the beneficiary of an inflow of foreign money from China of course, but also from other countries including Korea, India and Russia. In the first six months of 2013, nearly half of the twelve hundred luxury homes purchased in Vancouver were bought by foreign buyers.
Apparently, Vancouver may now not only be a “superstar” city (where high earners tend to cluster), but also a “hedge” city: one where social and political stability make wealthy people feel comfortable placing large portions of their cash. Our accessibility to the Pacific Rim, and our large existing Asian population, make our city an attractive destination, particularly for Chinese investors looking to shift assets from a more uncertain environment at home.
This globalization of our real estate market means local fundamentals have less influence. So perhaps our real estate professionals are right. Maybe the Vancouver market isn’t in “bubble” territory. Some very smart investors have decided our city is a good bet, or at least, is a better bet than many of their other options.