“Well in my neighbourhood, Point Grey, I would say that most of the people I know have lived here a long time and bought a long time ago. So in a sense the prices are sky high because a few rich people, HAM, overextended hopefuls, very cheap money and what have you have pushed the average prices up. These people around me are NOT millionaires by income, they just happen to now own a home that is worth millions that they bought for a fraction of the cost back when. So what I’m saying is that the percentage of household income it takes to buy a property now is just the metric used. What is the % of all properties in Vancouver that is sold every year? 2-3%? I don’t know the exact numbers but there are a lot of houses that are not being bought and sold, they have been lived in for years and bought on the cheap years ago.”
- DaMann at vancouvercondo.info 22 Aug 2011 8:43pm
This is a crucial point that is obvious to some but lost on many: ‘Prices are set at margin’.
It only takes a relatively small number of ‘rich’ sales to pump a market up, and it only takes for a relatively small swing down in the availability of those ‘rich’ buyers for a market to plummet.