After the US housing market got into problems, its Vancouver relative still worked well for some time and managed to grow until the beginning of 2008. But then our market began to get under the influence of the affordability demand pressure. Therefore, things slowed down and then in the following few months slowed down even more. Average price first stabilized and later dropped. With the outbreak of global economic crisis in the autumn 2008, Vancouver real estate sales fell to record-low numbers in January and February 2009 igniting the fear of painful and long real estate crisis, the same one we witnessed in the USA.

For the readers who agree with this, I would recommend to check out the detailed figures. In February 2009, the sales didn’t stagnate, but they already started to rise again! And from that moment on, all the crucial indicators concerning the Vancouver BC housing market are showing us that things are going fine. Sales in June 2009 were almost 6 times higher than in February and almost double compared to the last summer. Specifically, the sales in June 2009 were 75.6% higher than in the same month previous year. Average price drop came to a standstill in December 2008, remained flat till March, since then continues to grow steadily again. The price level of October 2008 was reached again in June 2009.

These fact shouldn’t seem so shocking, if we analyze the data in detail. Look at the new listings change graph. The rapid inflow of new properties on the market stopped many months ago in October 2008, after this month the overall inflow was falling.

It’s because one apparent advantage residential real estate can boast – people simply have to live somewhere. People do really need a dwelling, while they can quite well survive without cars, hairdressers or holidays. It is possible that the demand for homes drops, but it can hardly disappear completely, even if it was only for a limited time. Certain rules should be followed at the supply side. Your house often is the most expensive item of your general property. You can hold it and refuse selling during the period of falling prices, on the other hand such attitude stimulates new housing starts. Eventually, an agreement has to be reached at some point both for sellers and buyers, and the sooner the better.

So what are the underlying reasons behind Canadian market’s speedy recovery, regarding that the US market is still struggling with the crisis? The reason lays in the truth that in Canada, we had no wave of foreclosures, which was the most critical point. Compared to the financial health of institutions and individual house owners in the USA, the Canadian ones are doing much better. Canadians don’t necesssarily have to be wealthier, but apparently they are more ready to cope in case of any acute financial trouble. One of the sectors most damaged by the crisis in the US was the subprime mortgages, which is much less common in Canada. Of course our economic fundamentals could be in a better situation now, but they are still quite stable.

So what would be the most likely next situation on the real estate market in Vancouver BC? We can expect solid sales and average price growth in the next few months. Anyway, after the numbers achieve their pre-burst levels, the situation should stabilize, because of the overall economic slowdown. Next year will be awesome especially for first time buyers – with record-low interest rates and prices still below the recent peak, houses won’t be so affordable forever!

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