Macrealty November 2010 Market Update
The Macdonald Realty 2010 Real Estate Conference was held on October 19th at the new Vancouver Convention Centre. Over 300 residential agents, commercial brokers, and property managers attended this event which featured BMO deputy chief economist Douglas Porter, UBC real estate professor Tsur Sommerville, Bosa Development VP Eric Martin, Macdonald Realty president & CEO Lynn Hsu, and many other prominent guests and speakers.
The highlight of the event was a discussion between a host of prominent economists and industry leaders. Douglas Porter led the discussion with an overview of the Canadian economy and global forces that could affect the economic recovery following the great recession. He concluded that while there was a chance of a double dip in the global economy, it's much more likely that the current recovery would stick, albeit the pace of growth will be slow.
Tsur Sommerville gave a presentation on the BC real estate market and stated that the recent resurgence in prices meant that future gains would be slower than in previous years. That said, he also saw no sign of a pullback in prices and predicted slow, but steady price growth for the foreseeable future.
Eric Martin agreed that prices were unlikely to fall, stating that the US and Canadian housing markets are markedly different for one reason: bank lending practices. Martin outlined how Bosa is heavily involved in San Diego real estate and that business practices in the real estate industry there are archaic when compared with the Canadian system. The main difference, he said, is that most loans in the US are non-recourse, meaning that people in the US who go underwater with their loans have no incentive to repay them. This, of course, is compared to Canada, where almost all loans are recourse, which means that individuals are liable to repay the full cost of a loan, regardless of the value of their home.
Lynn Hsu showed a Macdonald Realty analysis of Chinese buying trends which showed that 78% of homes in Vancouver valued over $2 million were bought by this demographic. This trend is expected to continue as there is a 10-year backlog of investor category Chinese immigrants waiting to come to Canada, the vast majority of which are planning on settling in Vancouver. Sellers of these properties tend to pocket the appreciation in their homes and move to other asset classes in the city or to other municipalities in the province, which results in an upward push in prices.
Other interesting information from the event:
Georgia Straight Best of Vancouver Rankings
- 1) Macdonald Realty
- 2) Re/Max Crest
- 3) TRG
- 1) Macdonald Realty - $4.71 Billion
- 2) Re/Max RE Central - $2.75 Billion
- 3) Prudential Sussex - $1.98 Billion
- 4) CIR Realty - $1.75 Billion
- 5) Royal Lepage Foothills - $1.67 Billion
- 1) Macdonald Realty Group - Lynn Hsu
- 2) Purdy's Chocolates - Karen Flavelle
- 3) Capilano Group of Companies - Nancy Stibbard
- 4) Please Mum - Kathryn Adrian
- 5) Army & Navy Department Stores - Jacqui Cohen
If you have any questions, please do not hesitate to contact me!
(Click chart to see larger image)