Why home prices in Vancouver are so high?
This is one of the most common questions people ask when they are considering buying their homes in metro Vancouver. Vancouver is considered one of the most expansive cities in the world. Surrounded by snow-capped mountains and close to the sea, Vancouver is known for it’s beautiful surroundings and mild temperature most of the year.
There are many reasons put forward to explain why real estate prices are so high in Vancouver. Wealthy immigrants pouring money into the real estate market is an important driving force behind the rise in real estate prices in Vancouver. The real underlying factor is simple economics; the supply and demand of homes.
Lack of land parcels for housing development
Metro Vancouver has limited large land parcels for housing development. Vancouver is surrounded by mountains to the north, the US border to the south, ocean to the west, leaving a narrow band of land along the Fraser river delta to the east. The Agricultural Land Reserve (ALR)excludes a good chunk of this land from development, limiting the options for new housing developments.
A large percentage of the wealthy immigrants that come to Canada permanently choose Vancouver/Richmond over other destinations. There are concentration of shopping malls in Richmond and top ranking public and private schools in Vancouver making these 2 locations the preferred areas for wealthy immigrants to settle down.
The high cost of housing around the city cores have resulted in homem buyers settling for less expansive homes in the suburds or living in townhomes or condos in exchange for being near to the city. A far greater percentage of families in metro Vancouver cities raise their children in multi-family developments than families in other Canadian cities.