As the most populous city in British Columbia — and the most densely populated city in all of Canada — Vancouver clearly attracts a lot of people and attention.
And according to the 2015 Prime International Residential Index developed by U.K.-based property consultants Knight Frank, Vancouver ranks #1 in the global real estate market. In 2015, the city’s high-end market was up almost 25% from the previous year. (Actual percentage is 24.5%.)
On the Index, Vancouver’s closest competitor was Sydney, Australia — which grew at a rate of 14.8% in the same time period, nearly 10% less than that of Vancouver.
Vancouver was one of only four North American cities in the top 20 (others including San Francisco at #7, Toronto at #12, and Miami at #14), and one of only eleven North American cities in the top 100. The others included Los Angeles at #22, Boston at #27, The Hamptons at #30, Washington, D.C. at #33, New York City at #39, Aspen at #53, and Chicago at #64.
The main reason for the city’s surge is a lack of supply in the face of increased international demand — while the weakened Canadian dollar is also playing a role.
Interestingly, Vancouver is not considered to be one of the cities that matter most to the world’s wealthy. In fact, Knight Frank notes that it is more reflective of the fact that many ultra-high net worth individuals (UHNWIs) who are educating their children overseas while working and living in multiple locations around the world.
When asked about Vancouver’s luxury real estate market, ILHM expert and Vancouver REALTOR® Alan Skinner noted that it "has been somewhat 'frantic' for an extended time, but we are feeling a ‘cooling-off’ approaching where rampant competition made (particularly investors) determined to "win" at all costs.
“Home seekers are being trumped by foreign investors and a levelling off of prices is likely,” Skinner continued. "Profit taking" (sale of residential property investments) may result in further price declines."
With regard to Vancouver’s appeal, Skinner opined that "desirability, livability and the spectacular natural beauty are clearly the reason demand for residential property is so high.”
Mr. Skinner continued: “Alas, the policies allowing for unrestrained investment prevalent over the past 10 years or so has encouraged not only immigrants, but substantial pure speculation by those intent on investing in a safe, appealing environment."
But this kind of phenomenon sometimes faces scrutiny and even a desire to control (or even slow down) the explosive growth. Some governments are trying to limit foreign buyers with new property taxes, as the negative effects on overall affordability can be worrisome for the average homebuyer.
Some relevant facts and figures about Vancouver:
- Ranked one of the most livable cities in the world for more than a decade.
- Ranked as having the 4th highest quality of living of any city on Earth.
- 9 years ago, Forbes ranked Vancouver as the 6th most overpriced real estate market in the world and was second-highest in North America after Los Angeles.
- Vancouver has also been ranked among Canada's most expensive cities in which to live. Sales in February 2016 were 56.3% higher than the 10 year average for the month.
- Forbes has also ranked Vancouver as the tenth cleanest city in the world.
- Vancouver is consistently named as one of the top five worldwide cities for livability and quality of life.
- The Economist Intelligence Unit acknowledged it as the first city to rank among the top-ten of the world's most liveable cities for five consecutive years.
So while many would surmise that major metropolitan cities like New York, London and Dubai would be leading the pack when it comes to growth in global luxury real estate, it’s interesting to note that #1 — by a wide margin — is beautiful Vancouver!