Photograph by: Arlen Redekop , Vancouver Sun
There is no real estate bubble in Vancouver and markets will remain stable in 2013 — as long as interest rates remain low, immigration targets are met and Europe’s economy doesn’t melt down, a panel of real estate developers told more than 1,100 real estate professionals, business leaders and B.C. politicians on Thursday.
Colin Bosa, CEO of Bosa Properties, Tony Astles, executive vice-president of Bentall Kennedy, and Eric Carlson, president and CEO of Anthem Properties provided the Urban Development Institute’s annual market forecast while Diana McMeekin, president of Artemis Marketing, moderated.
Bosa said that as long as people continue to move to British Columbia, the real estate market will remain stable. He compared conditions in 2009 to those today and found that demand is similar, although immigration numbers were down in 2012 and two federal immigration programs — the investor program and the skilled worker program — are under review and could be subject to change.
In terms of supply, he said, more units were built in 2012 than 2009, but not many more than the 15-year average.
“The good news for all the salespeople in the room is, you’re going to sell lots of real estate this year, but the bad news is you’re going to have to work at it,” Bosa said, adding that projects near transit service will continue to sell well.
Southeast False Creek and Coquitlam Centre are two areas with a lot of unsold inventory, Bosa said. He said realtors in those areas might have to “sharpen their pencils” and that prices might decline.
However, he said Metro Vancouver condominium developers showed in 2009 that developers can “turn off the tap” quickly when the market slows.
Bosa said he believes people — and their money — from China will continue to flow into B.C. because they want to invest outside China and they want their children to grow up in North America.
“They like it in British Columbia because it’s safe and they’re accepted here,” Bosa said. “There is a good quality of life with universal health care and good schools.”
Two things that could stop the flow of people from China in to British Columbia would be a recession or a change to Canadian immigration policy, Bosa said.
“If you buy good real estate at fair prices, you can’t go wrong,” Bosa said. “It’s not that hard.”
Carlson said B.C. and Canada were protected between 2009 and 2011 while the rest of the world was reeling from the economic crisis. Canada did not really need the extremely low interest rates as much as the rest of the world, and the low rates coupled with immigration, stimulated the housing market.
“We felt a bit smug if we were provincial in our outlook. That ended in 2012. ... We started to feel the malaise for the first time,” Carlson said.
But he forecast that 2013 would be a stronger year because of B.C.’s ties to China and the U.S., which are both seeing economic recovery.
“I think this is the year that the fear factor goes away,” Carlson said, adding that he believes immigration will pick up this year and recovery in the housing market in the U.S. will mean many new jobs are created.
“U.S. unemployment will go down to 6.5 per cent this year, while U.S. gross domestic product will be trending towards three per cent by the end of the year,” Carlson said, adding that he thinks 2013 is a good time to buy real estate.
“I don’t think there is a bubble at all,” Carlson said.
Astles predicted the office building market will remain stable in 2013. He warned that a lack of supply means no rent relief until 2016.
He said Burnaby and New Westminster might have some oversupply, but Vancouver’s downtown is healthy. He said multi-family rentals were a low-risk investment, particularly because of limited supply.
He said there are some challenges when it comes to labour, with employees leaving for higher pay in Edmonton and points North, and with many experienced workers retiring.