The well heeled immigrants have a net worth of $1.6M. Although BC gets 17% of total immigrants to the country, they attract nearly 50% of the investor class, most of whom settle in Vancouver and buy luxury real estate and have heavily attributed to the expensive housing market in the last three years. There is currently a lull in the Mainland Chinese buyer demand but it is expected to rev up again in the coming years. The decreased demand has contributed to falling house prices in Vancouver's prime neighbourhoods.
Metro Vancouver is over 287,000 hecacres, with a population of just over 2 million, based on the 2006 census. Vancouver consists of11,000 ecacres and has a population of 578,000. Demographics show the age group of 20-39 and 40-64 are tied at 34.5% each of the total population and 50% of the entire population of Vancouver moved since the last census.
The 2006 census shows the population of Vancouver to be 579,250. It was 426,000 in 1971. Downtown Vancouver has over 43,000 and is one of the most populated neighbourhoods. The mother tongue of 49% is English, followed by 25% Chinese.
In Vancouver, there are over 253,000 private households, of which 38% are one person households and 2.2 is the average size of the households. 149,000 are apartments, versus 103,000 ground oriented housing units. 48% own and 52% rent. In 1971 42% owned. The median income is $47,000 per household.
In Metro Vancouver 65% own and 35% rent.
In 1891 there were 13,000 in Vancouver. In 1991 there were 471,000. In 2001 there were 454,000.
The follwoing is an excerpt from Ozzie Juroxk in 2002.
In 1998 I ran a headline "No Way Garth" telling our subscribers not to listen to gurus that made us feel like yokels if we paid off our homes - nay, if we did not put a maximum mortgage on the house and put it into the stock market. Turner even said that: " ... traditional real estate - multi bedroom (Is there any other kind?) real estate has a dim future and if you own some you should sell it, or borrow against the equity and invest in financial assets like stocks and mutual funds ... " I (through the Real Estate Institute) also tried to get our own estimable master demographer David Baxter on the same panel with Dr. Foot, from "Boom Bust and Echo" - another anti-real estate writer. But Foot declined. Well, Baxter in a fine speech this week told a 'breathlessly attentive audience' (if you are not, you get lost in the numbers), why Turner and Foot not only were wrong but WILL REMAIN wrong.
Yes, there is a future in the real estate ownership and investment rental market.
Baxter projects 1,096,000 million more people (a 47% increase in population) by 2025-2030. 582,300 more households will be formed, which will require an additional 379,700 ground-oriented and 207,000 apartment units. That would mean a 75% in ground-oriented unit increase and an 83% in apartment owner occupancy ... not too many ground-oriented rentals. A further 60% increase in apartment rental (based on historical data, he sees a possible shift there as more tenants will buy their property).
Additionally, there will be some 626,406 dwelling units owned by people who do not own real estate today. (They are still playing with play stations ... and we are talking about 25-year olds/ live at homes here.) By 2031, in the Lower Mainland some 1,215,352 people will change their places of residence - in Baxter's view - a very conservative assumption.
- Real estate in metropolitan areas anywhere in Canada will be a good investment.
- There will be 1.2 million transactions even if there is no growth. Big turnover of side-ways buying.
- New generation of retirees - the two-pension income in households have more money to spend than ever before. They are not downsizing - rather they are buying across, same value, different lifestyle.
- All major urban (URBAN!) markets will do well. Urban real estate will almost always have a use and hence a positive asset value.
- Younger population will grow at a rate of 14 -16 %. There will be a 200% growth in the 65 plus group
- Strong growth ... also from people coming in from outside
- With every passing year we are less likely to live in a senior facility. We like to stay independent, are healthier and more fit and live longer (JREI has argued this for years).
- Great future for real estate in the Lower Mainland.
- a. Unless there are outside factors such as rent control market (If you can't make a profit, there will be no building, no upgrading and values will drop, such as in Vancouver's downtown eastside. We want to preserve heritage, be environmentally friendly, provide cheap low-cost housing and create a sustainable community of drug users - and make money of it ... impossible. Like saying you want to lose weight, and then doing no exercise and eating like a horse.)
- b. If taxes, interest rates raise disproportionate to income. Required yield or risk goes up faster than incomes NOI or GDS - However the real estate risk is not NORTEL - it does not go to '0'
A great presentation. David Baxter has been a guest speaker at 6 JREI 'Land Rush' conferences. His outlook has always been pro real estate - but with solid reasons ... and his forecasts have an uncanny knack of having been correct.
By Ozzie Jurock