Question

Since 2010 housing market in BC is on the never ending price rise. Vancouver has faced the highest price boom ever since then and the average rental apartments in the city has risen to the unprecedented $2300.00 rent. Discuss the reasons behind the price surges considering the balance of supply and demand in the market and predict how the market will respond post Covid-19. Try to focus on the driving forces behind the rise and the other current environmental factors which will or may come to effect post Covid-19.

Answer 1

The Real Estate prices in Vancouver has notoriously risen over the years. This because of many reasons
1.There has been ineffective regulations that has led to vague and sometimes absurd price surge in the Real estate pricing.
2.Immigration is another reason. Wealthy immigrants have increased the property rates. They have also increased the rental pricing because of their high earnings.
3.The practise of assignment sales where in the new condo units change ownership two, three times even before it is ready for occupation. This drives the prices high.
4.The use of technology have eased purchasing properties, even for foreign investors. The decision-making process is shortened and hence the purchasing decisions are taking less and less time.

In this era of Covid -19, the Real Estate market has seen a slump. The total residential sales dollar volume was $3.3 billion in May this year, which was down by 43.5% from the last year. However, the sales price was up 3.2% as compared to last year. This shoes that the pandemic has little effect on the prices and any drop in the nearby future cannot be expected. The only effect seen is volume wise decrease and that is also seen as a temporary phase.