Housing Sector Ringing in Happy New Year
First the good news. Greater Vancouver’s amazing housing construction and marketing race will continue for yet another year.
And now, the really good news. Housing-price increases in the most expensive market in the country are only expected to be around 4.8 per cent to six per cent in 2006, far less than the double-digit increases that have been in the last decade.
And if all that isn’t enough, according to RBC Financial Group, housing is getting slightly more affordable here.
Despite dire warnings of a pending “real estate bubble” - emphatically rejected by senior Vancouver marketing analyst for Canada Mortgage and Housing Corporation Cameron Muir - about the only possible cloud standing in the path of another very strong housing market is the possibility of a pike in interest rates.
“A housing bubble does not exist in Greater Vancouver,” Muir told CMHC’s recent annual outlook conference, which is closely followed by the real-estate and development industry. “Speculative activity and growth in home prices are less than in any previous market cycle.”
There may be some fall-off in starts this year, but it will be mainly due to builders already at capacity being extremely careful about starting new projects, so they can keep their vital skilled trades schedules in line.
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