First off, maybe this explains why prices are so sharply increasing in BC?
Not only do Vancouverites live in the world's third-best urban centre, but they also enjoy the highest overall quality of life in Canada.Apparently Victoria wasn't on that list at all because I'd bet we'd have a pretty good argument for a better quality of life here.
According to the Canadian Real Estate Association, February 2007 set a new record high for average sales prices nationwide, led by Alberta and Saskatchewan at 34% and 17% respectively. BC experienced "modest" gains at 12% only 0.1% above Manitoba.
Want to live in BC? Be prepared to shell out an average of $413K for a SFH. Compare that to $126K for the equivalent property in PEI.
Now, I know, I know, you're all thinking this bear has gone and put on his bull horns. So I give you this:
Canada has only 5% of its available mortgages in sub-prime territory, I'd say we're not as likely to lose all of our sub-prime mortgage companies, just some. So keep putting your RRSP's into mortgage companies who 'guarantee' 14% returns... you'll be fine.
Xceed Mortgage Corp., a Toronto-based "non-traditional" mortgage lender, puts the default rate on Canadian subprime mortgages at 2.1 per cent — less than one-sixth the American rate. And to drive home the message of the comparative health of the alternative mortgage market in Canada, Xceed recently raised its corporate dividend and reported higher profits.That's not to say all is safe in WinterWunderland, as this most important sentence states: "A drop in Canadian housing prices and increases in interest rates would pose problems for borrowers."
Given that only 84% of our trade is done with our friends and partners south of the border, we'll be okay despite the talk of looming recession. And this dandy from August 2006. And this one from March 2006. Of course, George doesn't know what he's talking about does he?
And US new home sales declined too. But if that isn't indicative enough that the market is tightening up, check out how REALTORS are going after the 'little guys' who invariably appear during the bull periods and disappear when the bears wake up.
And purely anecdotal evidence gathered at a dinner party last night: retired couple owns two houses up on Bear Mt. Bought one to live, other to flip, both for sale, neither sold, on and off the market for the past 4 months. But they say its OK, high-end is a difficult market to sell in. I'll give them that.
Meanwhile, their early-20s kids proffer stories of buying and flipping town homes "because that's all people want anymore" and getting rich quick. (One's a telemarketer and the other a 2nd year apprentice, so they've got plenty of experience to back up their claims). I'll tell you, it was a real test to keep my mouth shut last night.