realtylinkonline

October 2002

Real Estate is a great investment

How would you like to own an investment that increased in value more than six times over the past twenty-five years? That's what would have happened if you had bought a home in Vancouver in 1975. The average sales price of $57,763 has now skyrocketed to a benchmark price of $385,000.

Population and income growth have driven price increases and the numbers are forecast to keep increasing since BC will be the fastest growing area in North America, says David Baxter, head of the Vancouver-based Urban Futures Institute, which studies land use and community change.

Baxter expects the population of the metropolitan Vancouver region to grow by 58 per cent to 3.3 million people during the next 25 years. That's 1.2 million more people than are here now. "While most of this growth will be in the 45 and older population, all age groups will grow," says Baxter.

The baby boom generation now aged 36 to 55 makes up about one third of our population. Their aging will result in a surge in the over-55 population of 145 per cent by 2026, who will eagerly "move out of the suburbs and back into the urban environment, while others will be more than content to remain in their single detached homes," according to Baxter.

As well, Vancouver will remain an internationally recognized magnet attracting a higher percentage of immigrants than other provinces because of our mild climate and strategic location on Canada's Pacific Rim.

For real estate investors prices can only go up, since housing demand is forecast at 29,600 new housing units per year.

Single-family homes will remain the most preferred housing type. But as the population ages, lower maintenance, higher density homes such as townhouses, apartments, and small lot, single-family homes will become popular.

Higher density will be a fact given that Vancouver is geographically constrained by the Gulf of Georgia, the North Shore Mountains and the Canada-US border. This results in high land prices and limited land available for development.