Vancouver’s flirtation with irrational housing exuberance has become one of the bigger stories of 2016. In February The New Yorker profiled the super-rich kids of the Chinese billionaires and millionaires who are either partially, mostly or wholly responsible for driving the price of an average home in Canada’s third-biggest metropolitan area to more than $1 million. A month later, The Walrus published an article that focused on the perverse effects of surging home prices and stagnant median incomes. Maclean’s this month delivered perhaps the most definitive account of the situation to date, taking the time to explain that Vancouver real-estate prices are subject to forces that go beyond supply, demand and gorgeous views.
Last week, Benjamin Tal, an oft-cited economist at Canadian Imperial Bank of Commerce, kept things going with a note on what could be done to restrain international demand. Tal has put more effort into studying Canada’s housing market than many of his counterparts on Bay Street. In recent years he has explained thoughtfully why Canada’s real-estate boom is different than what occurred in the United States in the years ahead of the financial crisis. Anyone who took his advice and ignored the boomlet in bets on a Great North housing bust is better off for listening. Canadian real-estate prices are being driven by local conditions, making a national calamity of the type that afflicted the U.S. highly unlikely.
Continue reading at Canadian Business ...