The old saying that “slow and steady wins the race” may be particularly true when investing in real estate. The days where new communities sold out in mere hours are behind us, now replaced by steady absorption over several months. In 2010, Vancouver experienced a more ‘normalized’ market – a market I predict will continue for 2011. And this, for most buyers, is great news!
As Canadians, we are extremely lucky to live in a place with an expanding economy , strong net immigration and a stable banking system, with the 2010 Winter Olympic Games just 11 months ago, I believe we will continue to reap the benefits from the unprecedented amount of global media coverage we received. Canada is clearly on the map, and with our ever-rising loonie, and on-going historically low interest rates, foreign investment remains strong. What this translates into is a stable real estate market with balanced confidence, demand and supply.
I predict that Vancouver’s sub-markets will experience different results this year. Suburban markets will experience a ‘clean-up’ of over supply with sales driven largely by first time buyers looking for good value. I also see that specific markets, such as Burnaby and East Vancouver will continue to experience steady, yet measured, price increases throughout the year.
HST will continue to be a nuisance creating confusion amongst real estate buyers. The reality is that people will still need housing and many developers have overcome HST objections by creating all-inclusive pricing programs. I see this trend continuing well into 2011 - at least until September when our “HST referendum” is scheduled to happen.
Of course, we will still face issues that have plagued us over the years – affordability, localized over-supply, and inappropriate product type to name a few. So it’s critically important in today’s evolving market that developers do their due diligence to research and crunch numbers in order to ensure that any new product brought to market is appropriately located, designed and priced. This measured approach can also be applied to the consumer, who are already taking more time to research the builder and compare their options. Investors already know that they need to buy and hold for the gain, rather than flipping.
Remember the story of the tortoise and the hare? A balanced and steady market is a sustainable market that often out performs in the long run. And that is good news for everyone.
Cameron McNeill
