Sunday, August 22, 2010

Vancouver High Prices: Too Many People On Too Little Land!

Below is a Vancouver Sun's article by Don Cayo, published on August 21, 2010:

What drives Vancouver’s house prices so relentlessly to levels four times higher than Winnipeg’s, and more than half again what Torontonians pay?

It’s simple, says Tsur Somerville of UBC Centre for Urban Economics and Real Estate.

“If you want Winnipeg-level house prices here, all you have to do is tear down the mountains and fill in the ocean.”

Well, that puts slow or stop to the steady influx of people — though the massive loss of amenities if our landscape were to be suddenly levelled might do that automatically.

Read more >

When homes can be purchased freely by those who have the money to spend, home prices are affected more by supply and demand, and less by affordability and average household income.

Below you can view "Canada's 6 Cities Housing Price Charts" by Brian Ripley. A market slow down will result in a correction* to current home prices, but a collapse in home prices is less likely to happen.

* A correction is a short term price decline of 5% to 20% or so.

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