Lately a report was released by a gentleman named Tsur Somerville at the Sauder School of Business at the University of British Columbia.
The report states that Vancouver is one of the cities in Canada with a highly unbalanced real estate market due to the fact that rental rates and sale prices of homes don't correlate. He states that the Vancouver real estate market is between 7% and as much as 11% over priced at this point in time. Ironically, the next day the Vancouver Sun ran with the story, and the worst case scenario of 11%.
This proclomation has sent many Buyers in the market place into a tizzy wondering whether they should buy or wait to see what will happen with prices and what will happen in the immediate future with our Vancouver Real Estate market. I have many of my own Buyers contact me wanting to know what we should do?
I have read through the report and have come to some of my own conclusions. The only city in Canada right now that has a balanced market according to this report is Toronto where rental rates are in line with sale prices. But what if Vancouver's rental rates are lower then they should be? What if the rental rates are under valued? I also find it very hard to believe that one could base this finding solely on what is listed on Craigs list for rent.
Since when did Craigs list become an indicator that our Real Estate Market is over priced and unbalanced? I don't think so.
My conclusions to this post are that this report is only one way of looking at a very small piece of a larger picture. Sensationalism sells news papers and gets you noticed and perhaps this is Mr. Somerville's fifteen minutes of fame?
The report can be read here: