Price, affordability drive buyers to suburbs

Saturday, December 31st, 2005

Expect higher real estate prices on ’06

Jason Craik

West Coast Homes invited two of B.C.’s top condo agents to share their thoughts about the new homes market in 2006. Below are those insights from Jason Craik, co-owner of MAC Real Estate Solutions and Bob Rennie, of Rennie Marketing Systems.

Low interest rates, strong in-migration and the most beautiful and livable city in the world contributed to another record year.

Who would have thought 2005 would have been another record year after 2004? With prices dramatically increasing who wouldn’t have thought a slow down in the market was inevitable?

2005 was another record year not just for total dollar volume in B.C. but for the number of sales.

Are we a world class city? You bet. International buyers are coming in droves from China, South Korea, India and Persia, to name a few, and they’re bringing wealth.

In Metro Vancouver weekend sellouts of new products have shifted from downtown to the suburbs.

Downtown developments are now taking a few months to sell, instead of days.

But developments in Burnaby’s Metrotown, Richmond and Surrey are now selling out in a weekend.

I call this the trickle-out effect; buyers are moving outward from the downtown core. Last year downtown buyers were buying Burnaby; last years Burnaby buyers are now in New West or Surrey.

This shift is driven by price and affordability.

In 2006 expect another surge in prices for the next wave of new developments around the Lower Mainland.

This will be created by construction costs which are rising dramatically and unpredictably from one month to the next.

Developments along transit routes will be in high demand in the years to come because of high gas costs and greater traffic pressure on commuter routes from all the suburban growth. We will see more people embracing these types of transit, especially rapid.

Overall I believe the above factors are going to continue to be the driving forces for a strong 2006, especially for price point/affordable housing.

Investment in downtown Vancouver will still be the most secure. My business partner Cameron McNeill put it best: “Vancouver is the Swiss bank account of international real estate”.

Some of my favorite Western Canadian markets to watch:

The Okanagan: Watch Albertans and Vancouverites make this their playground. They will continue to snap up recreational properties and push prices upward in 2006.

Calgary: Urban life has taken root in Canada’s fastest growing city. Downtown Calgary prices are what Vancouver prices were five years ago. Calgarians are getting tired of commuting and downtown condo towers are hot. Look for condo price inflation in 2006.

© The Vancouver Sun 2005

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