I recently attended an event at the Vancouver Board of Trade that featured some very well respected and prominent members of our real estate community discuss the supposed ‘housing bubble’ affecting the Vancouver housing market.

The panel of experts featured:

• Richard Wozny, Principal, Site Economics Ltd.
• Eugen Klein, Commercial Real Estate Investment, Klein Group; President-Elect, Real Estate Board of Greater Vancouve
• Ward McAllister, President & CEO, Ledingham McAllister Properties Ltd.

And was moderated by David Podmore, Chairman & CEO of Concert Properties.

Each speaker presented various facts and figures based on their respective perspectives, and all arrived at the same conclusion: Vancouver does not have a housing bubble.

The basic facts presented were that Vancouver’s housing market is affected by two main factors: 1) We are seeing very strong and steady demand and 2) our supply of new housing has been, and continues to be limited. Both of these trends are expected to continue in the forseeable future.

On the demand side:

•  Canada (and especially BC), has been in somewhat of a cocoon, as it has remained relatively strong and resilient in spite of the financial catastrophes that have impacted the US & Europe. 
• Real Estate is seen as a hedge investment in times of great uncertainty and risk – this makes Vancouver even more attractive to the international investor
• Infrastructure creates value in real estate. On the global scale Vancouver rates very high on the terms of Infrastructure (hard, soft & environmental), making it very attractive & desirable as a city to live and invest in. 
• Strong Immigration: According to CMHC stats we have 42,000-45,000 people moving to the GVRD each year, and they need places to live. In order to keep up with the population growth we need to build 17,000-25,000 new homes every year. 

On the supply side:

• Looking at our housing starts we are actually going to be slightly undersupplied over the next few years in comparison to demand. In 2011 we are expected to have 16.300 housing starts , and in 2012 that is expected increase modestly to 17,500. (We need 17,000-25,000 new starts annually to keep up with current population growth)

 Yes, Vancouver does have an affordability issue that is impacting the young middle class working resident. This is one of the biggest challenges we are now faced as a city. However our high prices are driven by supply and demand which are very real, not by speculation, and what we are seeing is not in fact a housing bubble.