Will the Real Estate bubble come for Vancouver?

The strength of the Vancouver Real Estate market has remained a strong point even though our southern neighbors have gone through quite a meltdown. Canada has ensured a safe passage through the mess that has been surrounding them by incorporating a banking system that is very closely guarded. The only question remaining is this: Since the Olympics have come to a close in Vancouver, is it now time for a financial hangover to start as many have expected?

Many people believe that we could not be on the verge of a meltdown since Vancouver has a very strong Real Estate market and this combined with the historically low rates in mortgages should surly be enough to sustain us. Because of the low volume of properties for sale, buyers are finding themselves paying much over the listing prices. Some properties are sold for ten, twenty and even up to two hundred thousand dollars over the listing price. While the largest increase in sale price occurs in the much desired neighborhoods and for a select number of properties, it really does happen. It is possible to have a bubble in the market but it will surely not be a large one. It appears like the micro-markets that are found in Vancouver Real Estate have gotten ahead of themselves and are in the most danger of a bubble effect.
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Townhouse and condo markets have been on a steady increase in the last year so this market should remain stable. The 1st time buyers are typically the people that are investing in these homes because of the lower rates in loans that are available. The Canadian Government has made some changes in the mortgage lending practices so that there is more protection in the chance that a bubble does occur. One of the changes that have been made includes requiring anyone that is not able to put twenty percent down on their property purchase (CMHC insured) will have to meet the same requirements that are necessary for someone to obtain a five year loan for the property, no matter how long the term will actually be. A change was also made to the amount that someone can pull from their equity to refinance. It was lowered from 95% to 90% of the value of the property. If a retraction was to occur in the market, there would be a larger margin of safety available to protect those that have spent nearly the entire amount that their property is worth. dallas homes for sale

Vancouver taxpayers have been left with over $700,000 in debt after the construction of the Olympic Village and it is expected to be paid off over the next decade. There is one local developer, according to reports, that has made $31.8 million from the high end units that were rented to people during the two weeks of the Olympics. There are about 1100 units in the village of which are for various different income levels and include amenities common to a typical community like parks, shopping, and services.

While the Vancouver Real Estate market is definitely in line for some challenges, it does look like the future is promising and bright. The mess that the United States has gotten themselves into has proven to serve valuable lessons to the Country and City about avoiding such a situation. It should be expected that small pockets of bubbles will arise as people continue to buy in a frenzy which will push prices to a range that is out of reach for many. If you look at the real estate for the city on a more broad scale you will see that there will be a slow paced growth as we go through 2010 and will begin a more moderate increase during 2011.
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