Analysts Bullish About Vancouver's Real Estate Market

The article below was in today's Province newspaper. I thought it was very interesting!

VANCOUVER — A trillion-dollar transfer of wealth as baby boomers come into their inheritances will help Vancouver's real-estate market, a new study finds.Sotheby's International Realty Canada's Housing and Economic Outlook predicts prices will improve in Canada in part because postwar babies are now coming into their inheritances."Another important influence on Canada's housing market is the unprecedented wealth currently being transferred between generations, with $1 trillion estimated inheritance to be received by baby boomers in Canada over the next 20 years," the report reads."According to the latest figures, Canadian baby boomers make up 42.4 per cent of the population and will individually average $56,000 in inherited capital."Sotheby's expects many boomers to hand those inheritances directly to their own children."An inheritance is an opportunity to assist their millennial generation children with down payments to enter the real-estate market, particularly in major urban centres such as Vancouver, where housing affordability is an ongoing concern." Bryan Yu, an economist with the Central 1 Credit Union, said the transfer of wealth could help the market — provided those inheriting money decide to spend it there."It is plausible that they will spend it in real estate," said Yu."That could support real-estate values, provided that is where that new wealth is spent."The question is whether that will be a driving force."Yu believes that a more important factor is Metro Vancouver's restricted land base — because of the mountains and the water, purchasers basically have two directions to go, either east or up."People want to be close to the urban core," Yu said. "This will help younger people with the funds needed for down payments for higher real-estate values."Sotheby's International Realty Canada president Ross McCredie told The Province that one year after our provincial election, he sees no warning signals."I'm quite bullish about B.C.," said McCredie. "A year ago we had uncertainties. Now we've got the pipelines, LNG."We are seeing significant investments coming into B.C."Sotheby's believes a rebounding U.S. economy and the falling loonie will spur real-estate gains."The state of the U.S. economy is inextricably linked to the Canadian economy, consumer confidence and in turn the health of Canada's housing market," reads the report. "At current rates, the price of Canadian goods, services and real estate have become more attractive to foreign buyers. Coupled with the uptick in U.S. economic growth, the falling Canadian dollar is expected to give a healthy boost to the Canadian exports and manufacturing sectors and the overall national economy, as well as to destination real-estate markets for foreign investment such as Vancouver and Toronto. It will also make Canadian recreational real estate more attractive to domestic and international buyers." McCredie said real estate is, at its simplest, supply and demand."We started doing these reports to understand where the demand is coming from," said McCredie."We want to inform our clients."B.C.'s in better shape than I've seen in a while."