It is straightforward for one to conclude that Vancouver real estate market is messed up quickly. Due to this scenario, this market has gotten attention from some quarters. You will hear it being discussed in media reports, the provincial administration is scrutinizing it, and it has also faced some action from the self-regulatory board. One can say that the market is under little review throughout. What is the real cause of this?
Presence of Foreign Buyers
Even though it can be seen as irresponsible or even harsh to discuss immigration issues here, we cannot run away from the fact that foreign money has profoundly impacted the real estate market in Vancouver. More especially the wealthy foreigners. Most rich investors from mainland China have come with their money bags, and they are doing some serious investment in Vancouver real estate industry hence driving the prices of such properties very high.
Recent studies conducted have shown that a few years have gone, the Vancouver metropolis has acquired the same characteristics as those of other Pacific gate away cities like Singapore, Sydney and even Hong Kong. Thus the rise in prices here can be attributed to high immigration rates which have to lead to population growth hence high demand.
Additionally, the rising prices of housing in Vancouver is attributed to immigrants who come in with a lot of wealth and also continue earning considerably high incomes outside Canada. That accumulation, plus the easy access to money for investment here has to lead to increased prices.
But you cannot attribute the crazy prices to the foreign investors alone. The other factor that has to lead to these prices being high is the presence of unscrupulous people, fast money coming in, and a lot of malice and evil practice when enforcing regulations and rules which are supposed to be governing business in this industry.
One thing that has been singled out is that those found to be engaging in unethical practices have been given fines and penalties that one can refer to as being some joke.
The reason why many realtors advocate for quick sale and hastening of the process is that this will allow them to resell the acquired investment to the next party and this is usually done with them making massive profits. This way, an agent will end up earning two commissions within one transaction and within a short time which makes the process even more expensive.
With technology, everything has become very easy. With technology, the distance of what initially was localized economic decisions has been dramatically reduced. Due to this, an investor needs not to set foot in Vancouver Canada to make a purchase instead they can do it online. This has opened this market to more people hence more competition, and with this, the result is high prices.
Some other factors include unethical practices like money laundering, the lack of unbiased information and a host of other contributors.