BUBBLY IN VANCOUVERHere's the link to the real estate report Rosie mentions.
There was a terrific in-depth piece in last Friday’s Globe and Mail on the Vancouver housing market titled, Is Vancouver in a Real Estate Bubble? Property prices are being driven up by very wealthy Chinese, who are flocking to Vancouver, under the government’s “Business Immigration Program”, which requires an up-front investment of $400,000. Average home prices are about $1.4 million and in some sought-after neighbourhoods average three bedroom homes can go for $2 million. In some cases, expensive homes are rebuilt at $200 a square foot.
Since Vancouver incomes are only slightly above the Canadian average, Vancouver has become less affordable than expensive cities like San Francisco and NYC. Relative to other Canadian cities, the affordability ratio is double.
There are a couple imminent risks to the bubble being burst. For one, the government may raise the minimum required for the investment visa, doubling it to $800,000. The other risk is the slowing Chinese economy.
Debunking bubble economies - Canada pt5 - David Rosenberg weights in
The real estate bubble is getting bigger and bigger in Canada, and I'm pretty sure that we're closer to the top and to the bottom of prices. Here's a quote from yesterday's Breakfast With David Rosenberg: