House Prices vs. Population Growth
The REBGV December 2009 stats are out and the average Vancouver House price has reached a mind-boggling $952,927 despite less than peak population growth rates.
Don sent in the information above – this chart shows Vancouver average house prices from 1977 to 2009 superimposed on a graph of the BC population growth in percent from BC Stats. The $300k price point correlates to 3% population growth.
One thing to keep in mind is that some divergence is only natural: one percent population growth in 2009 represents more people than 1% in 1977 because we’re starting with a larger base population. It’s still interesting to see the correlation between population growth and house prices. There was actually very high population growth in the late 70s and early 90s that relates to those housing booms. By the middle of the 90s this growth had real house prices nearly back up to what they were in 1981,
You can see the correlation between the housing market decline in the mid nineties and the drop in population growth. We’ve never recovered that high rate of population growth (as high as 3% in the mid nineties). We seem to have peaked at 1.7% in 2008. It will be interesting to see what BC and Vancouver population growth does going forward – will ‘everyone want to live here’ or will we see a a decline in population growth with fewer infrastructure project jobs and less construction?
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January 8th, 2010 at 1:52 pm
Actually, the move thing is pretty good advice.
I can attest that household incomes are higher here in Halifax. As for “the day of the house is over”….. no it isn’t. The day of the 1.4million dollar bungalow certainly is over, however.
Supply, demand and the free movement of capital and labour will take over eventually. Young people aren’t stupid. Those who haven’t locked themselves in to a 500 SF condo are going to look around Vancouver, say “We can’t afford the Vancouver lifestyle” and leave. They’ll move to places where the salary / price ratio is more favorable, which should mean Canada’s smaller cities.
Vancouverites will be locked into their mortgages which is unfortunate. It means they’re forever tied to that city and won’t be able to take advantage of opportunities that may arise in other towns. Worse, they’ll be locked into paying for the Olympics for the next 30 – odd years.
Of course most of them are too dim to understand what’s befallen them.
I love the fact that bulls look at hard data and are now trying to argue against hard numbers. It just shows they refuse to see reality, which would be sad if it weren’t so damn funny.
January 8th, 2010 at 1:27 pm
ESL for the love of God….