The Olympics Won’t Matter That Much.
I stand by what I said in a previous prediction on the Olympics and Vancouver Real Estate that there will be minimal transactions in Downtown Vancouver and surrounding areas because of Olympic security measures. Right after the Olympics there will be a spike in activity from demand caused by all the Buyers who were unable to buy during the time the Olympics are on.
What are your thoughts?
Please feel free to leave a comment, question, or suggestion below! Thanks!
Hi Mike,
Nice theory. So you predict a spike in activities from demand caused by all the Buyers who were unable to buy. What about the Sellers who will not be able to sell? This should increase the number of properties on the market as well? So increase in activity, yes, but not just buyers’ activity. Also remember that Vancouver is nice, but in Feb it rains all the time and so foreigners might not like that.
Best,
Raph
Hi Raph,
Good to hear from you and thank you for commenting!
Good point about Sellers not being able to sell. That is something I overlooked!
The activity of buyers is what will set the tempo of the market and if buyers aren’t buying during the Olympics, sellers won’t be selling. If there are more listings after the Olympics this will not effect the number of buyers and activity (ie number of sales), but it may affect price.
What are your thoughts?
It may affect prices, but I don’t know how. I try not to make predictions, either way. We have to wait and see. In any case there should be more activities. So even if prices are affected, one way or another, you should be able to make some money. Perhaps that an opportunity for realtors to lower commission rates
.
Raph
LOL!
Could be!
I’m positive you’re predictions are the gist what will happen! Wonderful post!
your. your. your. Sorry.
Hi Konstantin,
Good to hear from you.
Thanks!
Although it’s impossible to predict, I tend to lean to the side that the market will soften a little. There has been a lot of “hype” surrounding the Olympics and when it comes down it it, people don’t attend the Olympics to purchase property. Yes, we are a beautiful city, but we are also the most expensive city in the world to live compared to the wages we make. Historically, prices of housing have dropped in host Olympic cities once the Olympics are over. There will also be an influx of condos on the market (Olympic village, plus those who work for VANOC who travel with the Olympics selling their places). There will also be jobs lost and we may feel some of the aftereffects caused from the huge debt Vancouver has incurred from hosting these games. They just laid off over 60 City of Vancouver employees to help balance their budget in the last month. Plus, if interest rates start going up, we all know what will happen to prices. Less buyers, more homes…..
However, Vancouver is a unique city with a huge amount of International investors. I know first hand becauase I sold my house in Point Grey to a Hong Kong investor. I do think our market will always be strong. I just think there may be a little bit of a “price adjustment”. It seems just a little out of control at the moment! : )
Just my thoughts.
Hi Michelle!
Good to hear from you and thank you very much for taking the time to comment, I appreciate it!
I agree with some of the points you’re making. First I absolutely agree it is impossible to predict what will happen to Vancouver Real Estate after the Olympics. I also agree that people are not coming to Vancouver to buy property. As I said in the video, people are going to make several trips to get comfortable with Vancouver and the market here before they jump in. And not all of our visitors are going to buy. If the Olympics is going to have an upward effect on price it will take time and will not be immediate.
I am not convinced that prices are going to go down after the Olympics (I frankly don’t know whats going to happen, but I am optimistic!) This study from UBC says that prices don’t go down after the Olympics. From what I’ve read the Vancouver’s economy is improving and real estate price tends to be related to how the economy is doing.
Another reason I am not convinced prices will fall is this. Price and interest rates are also not always positively related. From 2002-2006 interest rates climbed from their post 9/11 lows while property prices increased at unprecedented levels.
I think the experience of the 2010 Olympics will be like Expo ’86. Expo was transformational for Vancouver and I would not be surprised if the Olympics are the same.
What are your thoughts?
Hi Michelle,
Department of finance recently published on their website that buyers will not be able to make purchases with 5% down and roughly 20% min down will be required and the interest rates will go up by 2-2.5%.
If we think about the fact that there will be many more properties on the market for sale from investors who bought apartments to sell after Olympics and their flexibility to sell even with less profit margins will all affect the market negatively. In that respect, department of finance’s decision to prevent purchases with 5% min down payment will have a positive affect in the future.
To sum up, prices will weaken after the olympics and then my prediction is that prices will be on a climbing trend by September 2010.
Hi Dennis,
Good to hear from you! Sorry its taken me a while to post your comment. I am out of the country at present.
I think the new mortgage rules will be good for Vancouver’s real estate market as it should keep it stable by ensuring the credit quality of buyers.
I’m interested to see how these changes will affect the rental market. Renters who were planning to buy when the rules were looser (ie no need to qualify for a 5 year fixed) maybe required to stay in their rentals for longer as they save to meet the new requirements. This could support demand for rental properties.
Also, the increase in the required downpayments for investor owned rental properties could result in less properties being sold as rental properties which could potentially reduce the stock of properties available for rent. This could reduce the supply of rental properties.
Less supply and more demand for rentals resulting in higher rents going forward?
I’d love to hear your thoughts!
What is the situation on the market after Olympic games, prices up or down?Today is March 12 2011…….
Hi Victoria,
Good to hear from you and thank you for commenting!
Prices are up from where they were during the Olympics.
What are your thoughts?