VANCOUVER (NEWS1130) – If you want to gauge the Vancouver housing market, look at the Chinese economy; that’s according to an analysis by the Conference Board of Canada.
The think tank says “Vancouver housing markets cannot fully escape the Chinese dragon.”
It says China’s influence on the local housing market rivals domestic factors such as mortgage rates, employment, and population growth.
Economist Robin Wiebe with the group says China has “strongly affected housing markets around the Pacific Rim,” including Vancouver’s.
“The Chinese GDP growth was more closely related to price changes in the Vancouver housing market than were employment conditions in Vancouver, or interest rates across the country.”
Wiebe says the correlation with China goes back to at least the 1990s. He adds other housing markets around the Pacific Rim have also been affected by China.
“Sydney, Australia is one and I’m told that Los Angeles has also been boosted by Chinese investment,” he says.
Wiebe thinks this “could mean that a substantial portion of Vancouver real estate purchasers do not need local jobs to buy any new home” or even need a mortgage.
He concludes that an improving Chinese economy “could help rekindle both new and resale demand in the Lower Mainland.”
The Conference Board says Vancouver and the rest of Canada are headed for a “soft landing” in the housing market rather than sharp drops in sales and prices.