Our friends over at Hawkeye Wealth brought this one to our attention. Some interesting insights on where the money is flowing in the real estate market. -ed.
Home prices have been in a sharp retreat in Metro Vancouver, Canada’s second largest investment market, ever since the British Columbia government introduced a foreign buyer tax in mid-2016. The concern for some is that commercial property prices will be pulled down by the residential sector. Recent price history suggests that won’t necessarily be the case, however.
When I visited Vancouver earlier this year, market participants seemed to be waiting for the next shoe to drop. With single-family homes and commercial properties competing for land, the thinking is that the decline in residential prices will bring down land values, and in turn bring down commercial property prices to the same degree as residential assets.
Historically, these price series had moved together. From 2005 to 2014 each exhibited a six per cent compound annual growth rate (CAGR) with only a few bumps and differences between the series over time….CLICK for complete article
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