Derrick Penner
Sun
B.C.’s hot real estate market is no bubble about to burst, panellists at the Vancouver Board of Trade’s economic forum said Wednesday. But the prospect of rising interest rates in the fight against inflation could take the steam out of the sector, one member warned.
Gordon Maroney, president of the B.C. Real Estate Association, said sales across B.C. in the first three months of 2005 are close to the record pace set in 2004, when realtors broke all previous sales records — racking up 96,300 transactions worth some $28 billion.
Georges Pahud, incoming president of the Greater Vancouver Real Estate Board, said consumer confidence in B.C. remains very high and the factors that drive home sales — employment growth, income growth, and positive inmigration — show no signs of slowing down either.
He added that planned investment for the province, such as the 2010 Olympics, Vancouver‘s RAV rapid transit line and Sea-to-Sky highway improvements, also bode well for maintaining the level of confidence that the province has seen.
As well, Pahud said that while Vancouver‘s prices might seem high, they are still only the seventh highest in North America and have not risen as quickly as cities such as Sydney, Australia.
Low interest rates, he added, have helped keep housing affordable despite rising prices.
Ozzie Jurrock, a publisher and real estate adviser, said he is bullish on B.C. and sees market conditions holding stable for the next 18-months to two years.
However, he warned that real estate is cyclical, “nothing goes up forever, and there are no soft landings.”
Jurrock said inflation in housing costs is one of the biggest under-reported stories in business with the most potential to hurt markets.
He noted that most jurisdictions don’t count rising housing costs in the “basket of goods” used to determine inflation rates. This helps keep official inflation rates low, and central banks less inclined to raise interest rates.
© The Vancouver Sun 2005