Wednesday, January 31, 2007

Vancouver Condo Prices

I've been working in Vancouver this week. Reading the article in today's Vancouver Sun about Vancouver condo prices and how high they can go, got me thinking.

My first thought was that the gentleman from Genworth Financial is delusional. He claims that supply and (non-quantitative) demand will keep the average condo price in Vancouver rising for the next 5 years. VHB went off on the logic behind his argument.

My second thought was "Of course!" Vukanovich is going to say that prices will keep rising due to his vested interest in the rising prices of condos. If I were selling widgets, I would say that my widgets were the best widgets in the world, that they will always go up in value, and that there will always be very high demand for my widgets. I profit from the sale of my widgets. This guy, directly or indirectly, will profit from the sale of high-priced condos.

My third thought was, hmmm, maybe I've been reading too many bear real estate blogs. Have I become delusional? Or am I now seeing the light? I believe that I am seeing the light, but only the future will confirm this. If prices keep rising forever, I guess I just jumped on another bandwagon, like Y2K and the Calgary Flames.

If Vancouver condo prices were to keep prices for the next 5 years, will Victoria's also? Do Victoria's prices follow Vancouver's prices? Or vice versa? What, if any, is the relation or correlation between Victoria and Vancouver?

Being relatively new to Victoria and BC, it appears to me that Victoria lives in Vancouver's shadow. Vancouver is the big brother, Victoria is the little sister. I may be entirely wrong. If not, how does this get reflected in real estate prices?