A slower market
What happens in China has a big influence on Vancouver’s housing market. The health of the Canadian economy, interest rates and lending policies are equally important in influencing the housing demand in Vancouver.
In 2009, China introduced a policy designed to cool housing speculation. The policy stipulated that buyers could purchase their first home with 30% down payment, and the purchase of a second property, required a whopping 60% down payment. This policy greatly influence Chinese buyers looking elsewhere to invest their money. Vancouver was one such destination where mainland Chinese buyers were actively buying residential real estates in cities like Richmond, Vancouver West, Burnaby and later in the North Shore.
When signs were abundant that the Vancouver market was topping out, Chinese buyers looked elsewhere for better opportunities. Canada’s change in it’s immigration policy also contributed to the cooling off in the demand for homes in Vancouver.
Factors affecting the Vancouver housing market
There are several factors slowing the market. The Canadian economy has slowed along with the rest of the developed world. But a series of recent policy changes enacted by the federal government in Ottawa have had the most impact, according to Realtors, marketers, lawyers and bankers.
Last summer, Canada’s immigration minister temporarily froze two programs for immigrants: the Federal Skilled Worker Program and the Immigrant Investor Program. The latter program grants citizenship in five years to qualified immigrants who agree to invest at least Cdn$800,000 in Canada. Real-estate agents said the freeze, which ends in January, has slowed buying from Chinese.
Future of Vancouver housing market
Chinese buyers are expected to continue playing a significant role in the future of Vancouver’s real estate market. But, in a down cycle when market sentiment is negative, declining sales and home prices need to stabilize. Current supply of homes far exceed demand, putting pressure on home sellers to accept lower prices to sell their homes.