Experts suggests it’s time B.C. step in to cool off Metro Vancouver’s real estate market

VANCOUVER (NEWS 1130) — Some experts say it’s time for the government to step in and do something about the severe supply constraint on the Lower Mainland as the housing market heats up once again.

Some properties in Metro Vancouver are being relisted for hundreds of thousands of dollars more within a short timeframe. And as prices and sales hit new records, an assessment from the Bank of Montreal describes the Canadian real estate market as “boiling.”

RELATED: BMO describes Canadian ‘boiling’ real estate market as ‘The Wild North’

In Vancouver, realtor Kit Sorongon doesn’t think the housing market’s position is unheard of but acknowledges how tough it is.

“We’re fueled by a lot of local investors, plus also we have the builders that are back in the market as well. Because of that activity, the end-users are actually trying to compete with the current pricing — I’m sure they don’t like what’s happening — but this is the reality they have right now.”

In East Vancouver, Sorongon had a house listed at 1.39 million, which sold in days for 1.408 million. Sorongon says the final price was market value, and he didn’t underprice it.

“When people see a 200, 300 thousand sale over asking, that doesn’t mean it went up by 200 in just a month — they priced it a little lower to create a lot of activity and bidding, and realtors know the real value of the market,” Sorongon explains.

Andrey Pavlov at the SFU Beedie School of Business says while it might be time for cooling measures, managing a stiff housing supply is a fundamental issue that needs to be addressed.

“In the short term, there is room for some cooling measures, like stricter down payment requirements and shorter amortization periods — might be a good idea. As long as all these measures are put in place with very clear plans on how we’re going to make it easier for people to increase supply in the lower mainland and especially Vancouver,” he explains.

As a matter of months Sorongon predicts the market will level off.