Only 5% of homes are "flipped"

A small number of home buyers are speculationg in the current market, according to Credit Union Central of BC's latest housing report, which notes that the number of buyers "flipping" a home within 6 months of purxhase is below that seen in past strong cycles. The survey found that only 5% of homes re-sold within 6 months compared to 10% in the 1989 peak and 20% in 1981.

A recent study of the condo market in Vancouver by Price Waterhouse Coopers found that the average price of a high-rise condo in Downtown/Westend has risen 20% in the past year. The Credit Union has forcasted that average BC house prices will rise another 14% this year and 7% in 2007.

According to the Credit Union it would take a major shok such as a global economic downturn to slow this market down.

The home building sector will be led by condos and townhomes as buyers are seeking more affordable options. The Credit Union also sees a tighter rental market as more tenants are priced out of purchasing a home.

"There is little possibility of economy wide cost-push inflation due to high energy prices or tight labour markets, which makes the interest rate outlook relatively favourable," noted Helmut Pastrick, the CCU chief economist.

Source: Real Estate Weekly West Side Edition.