On March 24,the Conference Board of Canada reported that China's increase in gross domestic product (GDP) caused a positive impact on the housing market in Vancouver. The report also mentioned that the influence of China's economic state on our housing market should not be underestimated as it is the biggest drivers behind housing activity in the area.
The report also said that observers need to pay a close attention to China's economic health when doing the assessment of Vancouver's housing market, it also suggested that Vancouver market welcomes Chinese GDP growth more than the Canadian low interest rates and rise in local employment. If the Chinese economy is indeed improving, it might starts to rekindle both the new and resale demand in the Lower Mainland.
The report also looked back over the past couple of decades, where the trend of sales in Vancouver home sales can be correlated to the Chinese economy trends.
- 1990s, China's GDP growth was "sluggish" with annual growth rates around 3.8% - 7.8%, correspondingly, Vancouver housing market was relatively slow even though the local economy was good and the employment was at 2.3% increased annually and the population growth was at 2.5%
- 2000s, Chinese GDP grew by over 8% annually, effect - Vancouver housing market took a dramatic upswing!
The pattern seems repeating again today, wherein Vancouver's employment growth was 2.1% per year average from 2010 - 2012, while population also grew 1.6% with low mortgage rate which should lead to more active housing market but over the same period, China's GDP growth came to 12-year low and Vancouver's housing market resale volumes fell to 23% in 2012.