More Trends for BC Real Estate and Mortgages

Beyond obvious sales figures and average sales prices being obtained in any given marketplace over the short term there are a number of things to consider. Market trends pertaining to mortgage investments should also take into account some underlying trends such as:

1. Rental levels and vacancy rates in rentals
2. Absorbtion rates of new properties being released into the market
3. Net migration into market areas
4. Employment and unemployment statistics

On the first item, rental and vacancy rates, the news is pretty positive for owners of residential real estate, and for lenders in rental housing markets, especially in BC. The rental report from CMHC ending in June for the first half of 2008 indicates a powerful demand for rental housing that has kept vacancy rates below 1% in the major markets of Vancouver and Victoria, as well as in the secondary markets in the southern part of the Province.

If you own market housing in BC you can rent it for a pretty fair price as well, with rental prices rising steadily across all markets except for the northern areas of the province.

On the second item, absorbtion rates of new housing, the results aren't quite as clear cut, although it appears that urban rates are still extremely high, despite a lot of new product coming on the markets. If I were an owner of a presale unit in anywhere other than Vancouver or Victoria I would likely be considering trying to sell it without a gain, or hold it for rental. Any speculative increase in value is probably moot at this point.

Vacancies in new housing coming into the market are still at historic lows, and given the extreme shortage of rental housing in virtually all markets in BC except for logging towns in the north, any surplus presold vacant property will tend to be absorbed into the rental pool. Investors in presold properties should hope that they own units in buildings that permit rentals, as resales next year may be a little slow.

As far as net inmigration into the Lower Mainland and British Columbia is concerned it will likely continue for the foreseable future, given the historically low levels of unemployment and high levels of jobs available. Again, with the exception of the logging industry, job growth is strong throughout the province, but particularly in Vancouver area. No pressure here for any reduction in migrations to the area. Given falling employment in Ontario and Quebec as a result of declines in manufacturing, inmigration to BC may in fact increase in the next part of this economic cycle.

BC, especially urban BC, continues to be a place where you probably want to invest your money in real estate and mortgage investments. In addition to being one of the best places on earth to live, it also still continues to be one of the best places on earth to invest your money in real estate, especially if you always maintain a long term view.