In the Vancouver condo market right now (Labour Day 2016) there are 3 buyers for every seller. Inventory (Units for sale) is at an all time historic low. Part of the problem is that developers are forced to build like it’s 1985 and not 2016. We continue to build mostly low to mid-rise condo buildings when we should be building much higher and increasing density. There are also massive areas of prime real estate in the city centre that are zoned for commercial/ light industrial only. The current price situation is caused by 2 main factors. Ultra low interest rates are the main driver (watch my video blog from last week Aug 28) and lack of supply. There are only 2 ways for home prices in Vancouver to start to moderate or decrease in any meaningful way. 1. interest rates rise in a significant way (2% to 3% or more, which is unlikely to happen in the next decade or more) 2. Supply of available condos increases dramatically. That supply could come from more owners deciding to sell (right now most owners are holding tight to what they own) and the City of Vancouver allows more re-zoneing and increase the density for developers.

Without one or a combination of both those catalysts occurring, don’t expect much price relief in Vancouver Real Estate over and above one of our run of the mill and quite normal Vancouver buyer fatigue type of corrections of 8% to 15% which might last 12 to 18 months before fully recovering. On average, we get one of these types of corrections in the Vancouver market every 3 or 4 years so we might be due for one.