I recently attended an interesting talk by Cameron Muir, Chief Economist for the British Columbia Real Estate Associate (BCREA), talking about, “The Real Estate Market in 2011: Boom or Bust?” Taking an overview of BC’s economy in the global market for 2010 we will see our GDP run at a level of about 3.5% growth. 2011 will likely be slower but still growing, forecasted at around 2.8%. The slowdown is a result of our top trading partner (the USA) continuing to see problems. (An anecdote that Cameron talked about was the USA is growing their job market by about 75,000 jobs a month, which would take roughly 9 years for their economy to pull back to previous levels!!) Clearly the USA picture is not all that rosy. This factor also creates a silver lining. Interest rates will still continue along at historically lower levels giving home owners more affordability for longer.
The factor really making a difference for BC is our population growth. The province of BC is second only to Alberta for population growth in Canada. In 2009, 71% of BC’s growth was international immigration, with another 10% growth from interprovincial migration, drawing more people and building our economy stronger (birthrate accounts for the remaining 19% of growth). Furthermore, in the category of international immigration, BC has the highest percentage of high net worth immigrants while Ontario gets the highest level of refugees (so we are getting the cream of the crop coming and investing in our province). Cameron presented a projection from BC Stats People 33 illustrating over the next 10 years from 2010 to 2020 the South West region of BC (Metro Vancouver area) will grow by 212,000 households. Housing will continue to be in demand as long as more people keep coming to our province.
The old Economic principal of Supply and Demand would tend to indicate with strong demand not being met with enough supply will continue to see housing in Metro Vancouver be a hot commodity and would be worth investing in sooner than later. We will always see ups and downs in the short run but over the long run the prices in BC will continue to trend higher.