It's been a great year for sellers in Vancouver's real estate market, but the high prices could lead to challenges in the economy and environment according to experts, Global News reports.
In November, Metro Vancouver's residential property price benchmarked at $752,500 which is an 18% rise from the same month in the previous year, says Real Estate Board of Greater Vancouver.
But the high prices don't discourage young people from looking to own a house. In fact, there are plenty of first-time buyers wishing to get in the market but constantly gets outbid, says the board's presidential-elect, Dan Morrison.
Morrison advises young clients to continue with their search, but also suggests managing their expectations by looking farther ahead.
"There's lots of product in the system, but you're not going to be buying a single-family home on the (Vancouver's) west side," he said.
Based on Vancity credit union study conducted in May, young workers may end up in the suburbs and beyond if the prices continue to rise, and possibly posing a threat to the city's future growth.
In a span of 12 years - between 2001 and 2013 - Metro Vancouver saw 63% rise in housing prices, while salaries made a slower increase of 36% within the same time period.
"In 10 years, most individuals may forgo a career opportunity in the region and relocate to a different labour market. If there is an abundance of outward migration, a labour crisis will occur," the study stated.
But Penny Gurstein from University of British Columbia believes that such exodus is already being experienced.
"The population is really skewed," Gurstein said.
With this low number of young people, there are several services in the community that will be affected such as low enrolment in schools which could cause them to shut down.
Gurstein points out that a persistence of such trend would turn Vancouver into a resort community that will only be affordable and livable for certain types of persons.
Vancouver is known for being one of America's greenest cities, and this too could be affected by the surge of suburban workforce that rely on their cars to get to and from work.
"Affordable housing has a large impact on commuting patterns," Gurstein said. "When you have your services and your work opportunities within easy proximity of where you live, of course you're going to be less dependent on travel."
Until the government can create incentives to encourage more housing and do something with properties that are sitting empty, pricey property is here to stay.
"We see no indication that things are going to change," Morrison said. "The numbers have been crazy. But it's been frustrating because there just isn't enough inventory out there."
