Housing market expected to remain strong in 2004

Friday, November 14th, 2003


Did you know that a home purchased in Dunbar cost just over $10,000 in 1960? In 2000, that home cost just over $540,000. It is anticipated, according to CMHC manager Charles King, the same home in Dunbar will sell for a whopping $1.45 million by the year 2020.

King was the first of a series of speakers at the CMHC Housing Outlook Conference, November 5, in Vancouver

Carol Frketich, CMHC’s BC regional economist, forecast the continuation of a strong housing market for 2004 and beyond. Housing starts are expected to rise slightly above 2003 levels of 25,500 to 26,200 in 2004, with single detached starts rising from 12,200 in 2003 to 12,500 in 2004, and multiple units from 13,300 in 2003 to 13,700 in 2004.

Frketich expects the housing resale market to achieve comparable levels to 2003, which will also continue to have a positive affect on the renovation and construction markets.

The BC economy will rebound in 2004, with a favourable labour market outlook, Frketich said. Interest rates are expected to remain low, and consumer confidence is expected to remain strong. While affordability issues and rising building costs pose risks, developers are responding with affordable condo solutions.

Keynote speaker Bob Rennie, of Rennie Marketing Systems, talked about the dynamic downtown condo market – who’s developing what, and who’s buying.

Over 75 per cent of MLS sales west of Main Street and over 35 per cent of East Vancouver sales are condos, he said. The East Vancouver market will continue to be particularly active, Rennie said, since empty nesters and first time buyers want to remain in their neighbourhood and will be looking to condos as either an affordable or more utilitarian housing alternative.

He also said that over 40 per cent of all downtown condos are being purchased by investors, a majority of whom are US buyers.

“Investors have become a very noticeable demo-graphic in our market. They’ve become the key rental suppliers,” Rennie said. “Investors are looking to own a piece of the rock; they’re looking for capital appreciation.”


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