Average home prices in Vancouver are unquestionably higher than anywhere else in Canada, and the city remains one of the priciest in the world. In the last 30 years, average prices rose from approximately $130,000 to well over $1 million today. Increased levels of immigration contributed to rising prices as Vancouver became the gateway for affluent Asian citizens to enter Canada and acquire mortgages.
The Conference Board of Canada, one of the country’s leading independent applied research organizations, believes immigration will soften the blow of elders downsizing their homes in Vancouver. Julie Ades, an economist with the Conference Board, predicts construction of new homes will decline as more retirees plan to sell, which will soften the impact on Vancouver’s housing market.
“That will help balance the market and we will likely see a mitigation of the negative impact on the price of single-detached dwellings.”
The Conference Board also analyzed the number of detached homes occupied by elder Canadians. The latest census data is from 2011, which shows 67 percent of Canadians in their early 50s live in single detached homes, but only 59 percent of citizens in their 70s remain in these homes. Ades feels this data indicates many elders have already downgraded, and that the market can manage the upcoming selloffs.
Ray Harris, President of the Real Estate Board of Greater Vancouver, agrees with Ades that the market will stabilize on its own. He believes younger homeowners who don’t absolutely need to relocate, will remain in their current homes as more seniors put their properties up for sale.
“Prices might drop but people who don’t have to sell would take their homes off the market, so it becomes a self-controlling mechanism.”