New home prices in Canada rose by 0.2% in February, the 23rd consecutive month-on-month increase, pushed up by a buoyant market in Calgary, Statistics Canada said on today.

The advance matched analysts’ expectations. Calgary prices rose 1.0% from January — the largest month-over-month increase since May 2007 — on higher material and labour costs. Calgary is the center of Canada’s booming energy industry.

Overall, prices rose in 10 cities, stayed unchanged in nine and fell in two. On a year-over-year basis new housing prices in Canada rose by 2.1% in February, down from 2.2% in January.

The Canadian government, which imposed tighter mortgage rules last July, and the Bank of Canada have long expressed concerns the housing market might overheat.

The new housing price index excludes condominiums, which the government says are a particular cause for concern.

The largest monthly price advances in February came in Regina, where prices were up 1.4%, and in Halifax, where prices were up 0.9% from January.

The Regina increase was largely the result of higher operating costs for builders and a shortage of developed land, while builders cited higher costs for materials, labour and developed land as the primary reasons for the Halifax increase.

Monthly prices declined 0.2% in Ottawa—Gatineau for the second month in a row, while prices fell 0.1% in St. John’s.

Prices remained unchanged in the combined metropolitan region of Toronto and Oshawa following six consecutive months of increases.

Prices were also unchanged in eight other metropolitan regions surveyed.

Source: National Post Wire Services

The average first-time homebuyer in Canada is 29 years old and expects to be able to put down a down payment of $48,000 on $300,000 home, according to a recent poll by the Bank of Montreal.

But the study, released Tuesday, also found that price expectations vary widely, depending on where the homebuyer lives in.

Those in Atlantic Canada say they expect to spend an average of $224,000 on a first home, while those in British Columbia anticipate to pay an average of $454,000.

Vancouver topped the survey as the most expensive city, with buyers there saying they’re going to shell out an average of $539,000 for a home, followed by Calgary at $474,000 and Toronto at $446,000.

BMO mortgage expert Laura Parsons says like with any major purchase, it’s important for people be realistic and prepared.

“What we tend to do is jump in the market when we’re ready, instead of starting a plan now,” she said from Calgary.

“Let’s start getting ready for it so we can start giving you good advice all along the way. Don’t be afraid to get things going.”

And while a large down payment is impressive, it does not necessarily mean that young people are diligently saving for their first home. Instead, many may be getting help from their Baby Boomer parents or friends, said Parsons.

Forty-six per cent of those surveyed also they’ll choose a fixed mortgage rate when they buy, versus 20% who will choose a variable rate.

The study also found that the average first-time homebuyer plans on paying off the mortgage on their home within two decades, with 20% anticipating they’ll be mortgage-free even earlier than that.

Twenty-three per cent of those surveyed say they will still have a mortgage within 25 years; 16% say within 20 to 24 years and 20% say within 10 to 19 years.

On the opposite end of the spectrum, seven per cent say it’ll take them more than 25 years to fully own their home, while 3% say it’ll take them between 1 year to 9 years to pay it off.

The survey also found that 31% admit they really don’t know when they’ll be able to stop making mortgage payments.

Source: Linda Nguyen, Canadian Press

Not for the faint hearted – the US $125-million price tag makes this residence the most expensive public listing in New York City!

The triplex penthouse located at The Pierre Hotel encompasses the entire 41st, 42nd, and 43rd floors. The residence encompasses 16 grand rooms, including a living room considered the most magnificent privately owned room in the world. There are four adjoining terraces, five master bedrooms, six full baths and three half-bathrooms, five working fireplaces, separate guest suites plus staff accommodations, and sweeping 360-degree views of Central Park and the surrounding city. The spread, formerly home to the hotel’s Pierre Roof restaurant, also touts a 3,500-square foot grand salon, once used as a ballroom.

Owned by the estate of late finance maven Martin Zweig, the triplex apartment is expected to officially hit the sale block before week’s end, according to multiple sources.

At $125-million, the Pierre penthouse would be the most expensive home publicly listed for sale in NYC, trumping the $100-million CitySpire penthouse and the reported $115-million Bloomberg Tower duplex owned by billionaire Steve Cohen. The $125-million price tag would also make it one of the top three priciest residential properties in America, behind a Dallas estate currently asking $135-million and tied with Los Angeles’ $125-million Fleur de Lys.

Still, for all its grandeur, several luxury brokers who have toured the space with clients suggest the unit may be in need of a little updating.

The Pierre is a white-glove building situated on East 61st Street, near Fifth Avenue. It’s comprised of a five-star hotel and 75 co-op apartments. Residents enjoy hotel amenities like room service — which even caters to pets — and twice-daily maid service, included in hefty monthly maintenance payments. As of 2006, annual maintenance for the penthouse was $464,600.

Residences in the building must be purchased all-cash and potential buyers must pass the stringent co-op board, a factor that typically lessens the possibility of a foreign buyer.

Source: Morgan Brennan, Forbes

Real estate has been slumping in the Lower Mainland, with sales volumes off by a third from long-term averages and prices down about five per cent from their peak.

Central 1 Credit Union is predicting a slow, weak recovery for real estate in British Columbia, saying it expects a flat market for both unit sales and prices for the next few years.

In its annual forecast released last week, the credit union predicts home sales in the province will gather a bit of strength this fall and hold steady for the rest of the year.

“The year-long correction in home sales is likely to bottom out in the first quarter of 2013, and we’ll see a slow recovery through the rest of the year. But the gains will be modest,” said Bryan Yu, an economist with the credit union.

Yu said there is always a market for homes that are priced well or have a special selling point.

“There’s always going to be some properties that sell quickly, if they’re priced well, or under-priced, perhaps,” Yu said. “But we’re not seeing that reflection in the over-all market that it’s anywhere near a strong market. Listings are high, overall sales levels are low and the reality is the price trends have been negative over the past couple of quarters.”

Yu said it is normal for the real estate market to become busier in the spring.

135 single-family homes have sold on the west side of Vancouver this March, which should result in 160 sales once the month is done; in March 2012, there were 152 sales.

Last year hit a 12-year low in sales, with only 64,400 sold (compared with 76,817 in 2011), and Yu anticipates there will be slightly fewer homes sold this year.

Yu said the resale housing market is hampered by sluggish employment and population growth as well as tighter mortgage requirements that have pushed some first-time buyers out of the market.

Following 2012’s four-per-cent decline, the credit union expects the province’s median annual price to slip five per cent in 2013 to about $363,000, a level last seen in 2009.

In Greater Vancouver, annual resale activity is forecast to decline about four per cent this year to 31,500 homes. The median price will dip six per cent to $474,000 but is expected to rise by the end of 2013, according to the forecast.

The report also says house sales in the Okanagan, Kootenay and Vancouver Island are expected to rise but for now remain near recessionary levels because of weak demand and excess inventory.

The forecast calls for an uptick of 13 per cent in unit sales in 2014 and a further eight per cent in 2015 as the economy improves and consumer confidence grows. Yu expects prices to remain flat through 2015.

Source: Tracy Sherlock/Tiffany Crawford Vancouver Sun

Monaco could soon become home to the world’s most expensive penthouse. Spanning 33,000-square-feet and situated on the top floors of a 49-story building in Monaco, this penthouse is now the world’s most expensive, with an asking price of $380-million. It features six bedrooms and a two-story water slide that goes directly into an infinity pool overlooking the ocean.

Prominent names are involved in the project which was dreamed up by architect Alexander Giraldi in a style inspired by belle epoque design. The responsibility for the apartment interiors has been given to the Alberto Pinto agency, while grounds are being done by landscape architect Jean Mus.

The construction started back in 2009 and is expected to be complete by July 2014.

Soaring to 170 metres on its completion in 2014, Tour Odeon will be the tallest building in Monaco and one of the tallest residential towers in Europe.

A limited number of luxurious private residences are available for purchase within the tower benefitting from unprecedented 360-degree views over the sea and the Principality, to be enjoyed through floor-to-ceiling windows and from expansive private terraces.

Residences will feature the very highest quality finishes and fixtures, including home automation and fully-equipped kitchens and bathrooms. Alberto Pinto, one of Europe’s foremost interior designers, has been commissioned to design and decorate interiors of exceptional elegance and comfort.

Owners will benefit from a comprehensive array of on-site services and amenities including spa and leisure facilities, state-of-the-art business centre, select retail boutiques and 24-hour concierge.

• 1,001 – 7,000 sq.ft.
• Leisure Facilities
• 24-hour security
• Balcony
• New Build
• Water View
• Swimming Pool
• Terrace
• International Development
• Freehold

Source: luxuryes.com/Knight Frank/Sky News

Fear and resentment simmer just below the surface for most Metro Vancouverites. Yet the issue that worries so many has mostly come up against public silence. Until now.

A recent survey by the respected Vancouver Foundation found three out of four Metro Vancouver residents who had an opinion agreed with the statement: “There is too much foreign ownership of real estate here.”

And Simon Fraser University explored this hot-button issue Wednesday evening in Vancouver through a panel discussion at the Djavad Mowafaghian Centre, which quickly sold out.

The speakers did what they could to respond to heated discussion of the growing housing dilemma in Vancouver, which Demographia has ranked the second most unaffordable city out of 325 around the world.

The average cost of a single-family detached home has jumped in Vancouver to $1 million. Meanwhile, median incomes have barely budged for decades. Only Hong Kong is more expensive.

“Housing affordability in B.C. remains poor and worsening,” says RBC senior economist Robert Hogue.

Vancouver’s unaffordable housing prices, he said, “depend on a constant flow of imported money.”

Young wanna-be homeowners are being frozen out of the city of Vancouver, as well as the North Shore, Vancouver, Richmond, Burnaby and elsewhere.

Local businesses, hospitals, organizations and universities can’t recruit top candidates because even skilled professionals can’t afford to live here.

Like Hogue, many say the region’s stratospheric prices are being heated up by real estate investors and speculators. Many are wealthy non-Canadians simply looking for a safe place to park their money.

What to do about this affordability crisis?

It’s a complex question. But one of the strongest factors working against coming up with a working solution is there is no solid data on which to base a strategy.

Unlike most countries, cities and jurisdictions around the world, neither Metro Vancouver, British Columbia nor Canadian government agencies keep public records on foreign ownership of real estate.

For some unstated reason, B.C. public officials are unwilling to learn from what has been done for decades in diverse political places — such as Florida, Switzerland, Austria, Prince Edward Island, Manitoba, Alberta, Denmark, Japan, Indonesia, Bali, Thailand, Australia, Turkey, Singapore and Beijing.

Indeed, these jurisdictions do not only collect data on foreign ownership. They have brought in various taxation methods to restrict property speculation and foreign ownership, so as to reduce investor demand. That’s what specialist say drives up prices and squeezes out locals.

Sadly, when British Columbians are forced by politicians to operate in a vacuum about rates of foreign ownership, we are not able to fully back up our opinions in this debate — which often pits homeowners and the real estate industry against young people and renters.

One side in the dispute doesn’t want to discourage foreign investment, admitting they like the out-of-country real estate profits. Some of them add that condos not filled by offshore owners can be rented out.

The other camp talks about how hard-working people deserve the chance to own a home. And they lament that untold Metro Vancouver homes sit largely empty, without residents who would be contributing more strongly to the neighbourhood, the wider economy and the tax base.

If we are to have an authentic dialogue about these competing arguments, we need to press governments to start gathering the facts. Fast.

So far B.C. politicians have shown no willingness to gather accurate data. As elected officials who are supposed to answer to voters, their inaction seems irresponsible.

Perhaps they fear being labelled racist. But that doesn’t make sense, for many reasons.

The foreign investor debate is not about immigrants to Canada buying homes for themselves. And it should make no difference to government officials collecting property data whether non-Canadian investors come from Seattle or Dubai, Paris or Singapore.

In addition, concern about foreign ownership clearly cuts across Metro’s ethnic spectrum. The Vancouver Foundation survey, for instance, found residents who speak Chinese in their homes, by a margin of almost three to one, also agree “there is too much foreign ownership of property here.”

So far there have been only a handful of public figures willing to openly air this burning issue. They include Peter Ladner, former Non-Partisan Association councillor and a current fellow of SFU’s Centre for Dialogue.

“Because our housing prices are around 10 times median income – with five times being ‘severely unaffordable’ — potential newcomers to the region stay away and the valuable workers move away,” writes Ladner.

“If we are really serious about affordability in Vancouver, we would be looking at more homes for more people and fewer homes for investors and speculators.”

Ladner is supported by Sandy Garossino, a prominent businesswoman and arts philanthropist. Andy Yan is another weighing in, trying to figure out the extent of foreign investment, and empty dwellings, in Metro Vancouver.

But Yan, who spoke at the forum sponsored by SFU’s Vancity Office of Community Engagement and the SFU City Program, would be the first to admit he has had to use desperate measures to try to collect any sort of information on foreign ownership.

Random stories, from neighbours or realtors, are not enough, suggests Yan, who has been consulting for Bing Thom Architects and a committee of the city of Vancouver.

Wittily, Yan explains the research challenge: “The plural of anecdote is not ‘data.’”

To determine the extent of foreign ownership, Yan also admits it’s not entirely reliable to track the addresses to which B.C. property assessment reports are sent. Nor is it really dependable to determine if condos are vacant by measuring how much electricity they use. Which he has tried.

What’s stopping politicians from collecting proper data?

If scores of jurisdictions around the world, including in struggling developing countries, are able to collect solid information about foreign ownership of real estate, why can’t it to be done in our rich, technologically sophisticated province?

Hong Kong is just one of many places getting serious about the problem of foreign ownership. As Ladner has pointed out, Hong Kong officials have discovered that, since 2009, “half of new luxury apartments purchased are never occupied. Is this where Vancouver is heading?”

Foreign ownership of residential property is a divisive issue, which cuts to the heart of the hopes and dreams of most Canadians. Politicians, at the municipal, provincial and federal level, need to respond to it in the way of scientists.

Faced with important questions, good scientists and academics don’t just cast aspersions about someone else’s character. They get serious about collecting evidence. Then they move to solutions.

Only by checking the facts can our society creatively move forward for the benefit of as many Canadian residents as possible.

Source: Douglas Todd, Vancouver Sun

Nearly a quarter of condos in Vancouver are empty or occupied by non-residents in some dense areas of downtown, a signal that investors play a significant role in the city’s housing market.

And the city overall has a much higher rate of empty apartments and houses than other Canadian cities, with a rate closer to places like New York and San Francisco at the height of their mortgage crisis in 2010.

Downtown, the rate is so high that it’s as though there were 35 towers at 20 storeys apiece – empty.

That’s the latest discovery that adjunct UBC planning professor Andrew Yan made when he analyzed 2011 census numbers to try to add more information to the contentious debate over whether Vancouver is turning into a high-end resort or offshore investors’ holding tank.

He revealed those numbers Wednesday night, as a capacity crowd turned out to listen to speakers on a panel at SFU Woodward’s talk about “foreign investment in Vancouver real estate.”

In all, the city of Vancouver appears to have about 7,500 more vacant housing units than what would be expected in most other Canadian cities. For Metro Vancouver, there are around 15,000 to 20,000 more.

That sign of high vacancies and non-resident-owned units, which contradict some other studies and assurances that Vancouver is not being flooded with investors, should give the city pause, analysts say.

“What kind of community are you living in if there are that many empty? For a city to have that kind of vacancy, it’s like cancer,” said Richard Wozny, a real estate consultant, during an interview Wednesday. “It distorts density and it’s delaying the impact. It raises the question ‘Are we over-building?’”

Mr. Yan, who specified that it’s not possible to know exactly why so many apartments were empty, said data indicates Vancouver is creating neighbourhoods that appear to be very dense, but actually don’t have an active full-time population.

That gives a skewed picture of, for example, the amount of commercial activity they can support.

In Coal Harbour, where up to one in four condos is empty in the tower-dominated waterfront neighbourhood between Stanley Park and the downtown convention centre, the scattered shops in the area often struggle to stay in business. By contrast, the West End, which has a low rate of empty residential units, is bounded by three streets – Davie, Denman, and Robson – that are packed with busy small shops and restaurants.

Mr. Yan said that the high numbers of empty apartments don’t prove there’s a problem with foreign investors, but they do indicate that Vancouver has a large proportion of general investor buyers, be they offshore or Canadian.

Housing analyst Tsur Somerville, director of UBC’s Centre for Urban Economics and Real Estate, said the data he has seen also indicates that Vancouver built more housing in the 2006-2011 period than the number of new households that were added to the city’s ranks.

That means investors. There’s nothing wrong with that, as long as those units are occupied, said Mr. Somerville, also on the panel.

“The problem is vacant units since that’s demand for real estate without housing people.”

Mr. Yan’s analysis entailed isolating the census data on dwellings that showed up as either “unoccupied” or occupied “by a foreign resident and/or by temporarily present persons” on Census Day 2011, which was May 10.

“These units could be non-resident occupied because their occupants were just away for the Census Day, between rental tenants, or moving in a just-opened building, but there is also a chance that they are someone’s pied-à-terre, vacation home or empty investment holding,” observed Mr. Yan.

In the city of Vancouver, the rate of those kinds of dwellings stood at 7.7 per cent overall, with some parts of the downtown as high as 23 per cent. In the city of Toronto, the rate was 5.4 per cent; in Calgary, 5 per cent.

If Vancouver’s “non-resident” category had the same rate as Calgary’s, it would have had only about 16,500 empty units on Census Day – the level to be expected in a regular city, where some part of the housing stock is always going to be empty for one reason or another. Instead, more than 22,000 units showed up in that category. An analysis for the whole Lower Mainland shows that it has between 15,000 and 20,000 more empty units, proportionally, than the Calgary or Toronto metropolitan regions.

Source: Frances Bula, Globe and Mail

A slowdown in Canada’s housing market will continue through 2013 and years of stagnation may follow, but no crash is likely because demographic trends will support demand in the medium term, a report by Scotiabank said on Monday.

The report by Canada’s third-largest bank said that home sales have already dropped more than 10% from spring 2012, with prices leveling off but not yet falling except in particularly hard-hit markets.

Housing, which slowed but did not crash as a result of the global financial crisis, helped sustain Canada’s economy through much of 2010 to 2012 but is now starting to slide just as the U.S. housing sector has begun a clear recovery.

Scotiabank said the housing slowdown will trim a quarter of a percentage point from Canada’s economic growth in 2013 and 2014, while the U.S. housing recovery is adding half a percentage point to annual growth rates there.

While Canadian home sales may continue to slump, the report said, prices will likely remain above year-ago levels until at least the second half of 2013, and will not drop as dramatically as they did in the United States.

Scotiabank senior economist Adrienne Warren said she expects a decline in prices of around 5% but that the drop will likely play out over the next couple of years rather than happen quickly.

She also said demographics, including steady immigration and the preference of baby boomers to remain in their homes, will support housing demand.

“Contrary to some dire predictions, population aging will not fuel a demographically induced sell-off in Canadian real estate. However, an aging population does point to a lower level of housing turnover, sales and listings,” Warren said in the report, the bank’s annual real estate outlook.

The report said today’s seniors are healthier, wealthier and living longer than previous generations, and attached to their homes, making them less likely to sell in a down market since many will not need to tap into their principal residence to finance retirement.

Warren said immigration, which adds some 250,000-300,000 people to Canada’s population every year, will increasingly be the dominant source of new household formation. And while immigrants typically rent on arrival in Canada, they seek home ownership after about five years and their rates of homeownership approach the 70% rate of native-born Canadians after 10 years.

Immigration is most likely to support house prices in big cities, Warren said. That should help put a floor under the market in Toronto and Vancouver, which had the hottest markets prior to the slowdown.

“Relative to their Canadian-born counterparts, immigrant households are more likely to reside in large and mid-sized urban centers, which could fuel relatively stronger housing demand and prices in those areas,” Warren said.

Source: Andrea Hopkins, Reuters

New York is the lone U.S. city to land in the top 10 most expensive residential real estate markets in the world, according to a new report from Knight Frank.

But with luxury homes in New York costing anywhere from $2,030 to $2,240 per square foot, it’s only about half as expensive as the most expensive housing market in the world: Monaco. There, luxury homes can cost $5,350 to $5,920 per square foot. Monaco, which does not charge a personal income tax, was particularly popular with Russian buyers over French markets, according to the report.

Luxury real estate prices there increased 2 percent year over year. Prices in 2012 jumped the most in Indonesia, where they increased 38 percent in Jakarta and 20 percent in Bali.

The number of wealthy people in the world is also growing, and set to increase quickly in the next decade, according to the report.

The number of people worldwide worth $30 million or more increased by almost 8,700, or 5 percent, in 2012, and their number is set to increase 50 percent in the next 10 years, according to Knight Frank’s forecasts.

The following are the top 10 priciest housing markets in the world and the average cost per square foot in U.S. dollars, according to the report:

Monaco: $5,350 to $5,920
Hong Kong: $4,570 to $5,050
London: $3,890 to $4,300
Geneva: $2,720 to $3,010
Paris: $2,350 to $2,600
Singapore: $2,340 to $2,580
Moscow: $2,040 to $2,260
New York: $2,030 to $2,240
Sydney: $2,020 to $2,230
Shanghai: $1,820 to 2,020

Other U.S. cities rounding out the top 20 list were Miami at number 13 (priced between $1,300 to $1,440 per square foot) and Los Angeles at number 15 (priced between $1,210 to $1,340 per square foot).

Source: Realtor Mag/Business Insider

Vancouver’s housing market fortunes closely mirror trends in the Chinese economy, according to an analysis by an economist with the Conference Board of Canada.

Robin Wiebe says his number crunching has found that there are strong links between home sales, price growth and housing starts in Vancouver and the overall health of the economy in China.

Wiebe made the same comparison with the Toronto housing market and found that Chinese gross domestic product figures were linked to growth in that city’s housing sales, but not to price or starts. GDP is the market value of all goods and services produced in a country.

All aspects of the Vancouver housing market and economic growth in China move together and are statistically significant, Wiebe said.

“It’s another piece in a puzzle,” he said by phone from Ottawa on Monday. “It’s evidence that the Chinese economy moves with various Vancouver real estate variables. It’s another piece of evidence that supports the link between Vancouver and China.”

In the Hot Topics in Economics blog on the Conference Board of Canada website, Wiebe wrote that the effect of China’s economic growth on the Vancouver real estate market rivals the effects of three domestic factors: Vancouver’s population growth, changes in employment, and mortgage interest rates.

“The chief implication is that observers need to pay attention to China’s economic health when assessing the outlook for Vancouver’s housing market,” said Wiebe, a senior economist at the Conference Board’s centre for municipal studies.

Determining the extent of foreign ownership of real estate is impossible in Canada. No level of government keeps track of the country of origin of purchasers who often use local buyers as proxies. Wiebe said that in the 1990s, Vancouver’s housing market was relatively sluggish, despite what he called a decent economy and favourable demographics. Annual employment increases averaged 2.3 per cent while population grew at 2.5 per cent. During that same time, average resale prices rose less than three per cent per year, and ended the decade up 24 per cent.

“The market performed much better during the following 10 years,” he said. “Annual sales of existing homes exceeded 36,000 units, a previously unheard-of volume, for five straight years between 2003 and 2007. The average transaction price doubled between 2000 and 2009, with a 20-per-cent spurt in 2006 alone.”

A big contributing factor, he said, was a substantial drop in mortgage interest costs, which helped people buy homes. A five-year-term mortgage, for example, dropped from 13.2 per cent in 1990 to below seven per cent in 1998, before increasing in 1999. By 2009, the five-year rate fell to an average of 5.1 per cent.

Wiebe wrote that China’s economy grew by only 3.8 per cent in 1990, following a 4.1-per-cent increase in 1989. That compares to the previous five years where GDP growth averaged roughly 7.8 per cent.

The 1990s “ended on a weak note with an annual GDP growth of 7.8 per cent in 1998 and 7.6 per cent in 1999. The 2000s were significantly better — annual Chinese GDP growth never dipped below eight per cent.

“Now the pendulum has swung again,” he wrote. “Despite slightly faster growth in employment (2.1 per cent on average in 2010-12) and population (1.6 per cent), along with even lower mortgage interest rates, Vancouver resale volumes fell 23 per cent in 2012 and average resale price dropped 6.4 per cent. One clue to this tepid performance is that China’s real GDP growth fell to a 12-year-low, estimated at only 7.8 per cent, in 2012.

“Statistical analysis confirms the importance of China’s economic health to Vancouver’s housing markets,” he wrote in the blog.

He said his analysis shows that local employment growth is not significantly related to existing home sales, price growth or housing starts.

“This could mean that a substantial proportion of Vancouver real estate purchases do not need local jobs to buy any home (new or existing) and that many do not need a mortgage to buy a new home,” he said. “On the other hand, better economic health in China gives its residents wealth to spend on Vancouver housing.”

Tsur Somerville, a professor at the University of B.C. and director of the Center for Urban Economics and Real Estate at the Sauder School of Business, said a correlation between the Vancouver real estate market and GDP growth in China is not causation.

“It implies that our housing market is driven by what is going on in China,” he said on Monday. “I think there is an element to the fact that changes in world commodity prices are affected by industrial output in China. That certainly affects all of us.”

Somerville said there is no doubt that the Chinese economy and the rest of the world are linked. But he believes bigger factors at play may be the internal market and total immigration from Asia, not just China.

“The house price growth has been stunning in Vancouver since the year 2000,” Somerville said. “I would argue that a decline in interest rates has had a much bigger effect than the growth in Chinese GDP.”

Source: Kevin Griffin, Vancouver Sun