One of Canada’s top credit rating agencies said last week that the country’s most expensive housing market may not be in any danger of a significant correction or revision, even if prices are still too premium for the typical Canadian consumer.
DBRS covered data in 39 Canadian markets, the United States, and Australia, and released a prospectus of sorts for the Vancouver real estate market on Wednesday. According to the agency’s data, competition in the Vancouver market remained as strong as it has seemed to be for the past three years; property sales in Vancouver increased by 28.9 percent in June 2014 as compared to June 2013, while the average sale price of a detached home in the area had hit $1,200,539.
All told, DBRS believes that with home prices still increasing faster than disposable income, affordability in Vancouver is severely compromised.
With the Canadian economy quite stable and low mortgage interest rates featuring in the present real estate climate and possibly remaining that way in the coming months, DBRS said it is not too likely that Vancouver market stats would need a significant correction. According to DBRS, there do not seem to be any key catalysts or variables that would prompt a correction in the Vancouver market “over the medium turn.” The agency also said that there are certain headwinds in the market that may constrain development in Vancouver, though the quality of living is not one of them.
“Vancouver’s status as one of the Canadian cities with the highest quality of living helps ensure continual population growth,” observed the agency. “The city’s diversity and year-round mild weather help attract immigrants, thus keeping demand for housing high.”