Vancouver among top real estate bubbles: UBS

VANCOUVER (NEWS 1130) – Vancouver’s real estate market remains a major bubble risk, according to an annual index released by a Swiss bank.

We come in at Number 4 in UBS’ annual index, down from Number 1 last year.

This report from UBS points to the fact that our city, along with Toronto, avoided being dragged down by the 2008 financial crisis — and the combination of foreign demand and loose monetary policy since then has led to a situation where home prices have detached from local incomes.

Economist Bryan Yu with Central 1 disagrees with the suggestion our market is in bubble territory.

“We’ve seen in Vancouver over the last couple of years [experience] very strong employment growth,” notes Yu. “We have an economy that’s humming along quite well [and] people coming into the region driving demand for property.”

Yu feels one factor not fully considered in this report is the expectation that this region will densify rapidly in the coming years.

“When we’re looking at Vancouver — proper, especially — what we’re seeing is that there’s still a lot of single family land,” says Yu. “A lot of property has to be densified to meet the needs of this population going forward.”

Toronto, Stockholm and Munich top the list above Vancouver. In fact, this is Toronto’s first time appearing on the list, as it comes in at Number 1.

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