Real Estate Market Update: Jet Setters, Direct Flights, and Real Estate
The wealthy jet setters think nothing of jumping on a plane and flying to another continent to dine at a Michelin three-star restaurant or to have a well-known, highly sought-after tattoo artist ink-up an arm. You often see these people when traveling through the larger international airports or when you are making your way through the first-class cabin as you head for your coach seat. These people—the jet setters—have tons of money, as well as a lifestyle and schedule that allow them to jet around the world. Often, they are looking for a new destination experience that will top the last one, all the while traveling in style; first class, airline lounges, and of course, world-class destinations.
Airlines are on the leading edge of understanding the consumer interests, wants, and needs in regard to destinations. For instance, when Fort McMurray or Fort St. John oil and gas production took off, WestJet, Air Canada, and other airlines stepped up their flight schedules. These scheduled flights were out of the need to provide service for the thousands of workers flying in and out of these communities for their jobs. But what about airlines that schedule flights out of the wants and desires of the customer? They look at unlocking the motivation of the customer and delivering on those wants. In most cases, these are direct flights to world class destinations; Paris, London, New York, Hong Kong, Beijing, Sydney, and Vancouver, to name a few.
Vancouver airport, otherwise known as YVR, continues to be a destination of choice for many of these super rich jet setters with new flight routes and more direct flights from all over the world. As of June 2017, China Eastern Airlines started offering direct flights from Kunming, the largest city in the province of Yunnan, China. The airline offered a direct flight from Shanghai, but the demand and the three hours shorter flight time made Kunming an obvious departure choice when scheduling direct flights to Vancouver. Sichuan Airlines is another Chinese airline offering new direct flights to Vancouver from Zhengzhou, the capital city of the province of Henna. Even Air Canada is adding more direct flights to Paris, Zurich, and Sydney. Airlines know where the people want to fly and will only offer direct flights when they know the demand is high.
So, why does real estate matter when we discuss jet setters and direct flights? Jet setters love direct flights when looking for a home away from home. The wealthy want easy and quick access to their various homes around the world. Therefore, easy and direct flights are a must. It also needs to be a world class destination that is safe with great shopping, incredible dining, and an “x factor” of some sort. The “x factor” could be world-class skiing, breathtaking mountains, scenic beaches, or an exhilarating nightlife. Vancouver, checking all the previously stated criteria, is known to be one of these locations. It is a safe playground for the ultra-rich that love to own real estate, and it should come as no surprise that airlines from around the world have targeted YVR as an airport that is in need of direct flights from all around the world.
There has been much talk and speculation that the foreign real estate buyer has checked out of the Vancouver market and has moved on to other world class destinations. However, if the airline’s big thinkers and bean counters have anything to say about this, they’d concur that the wave of jet setters is actually going to continue and even escalate. Do they know something we do not know? Is there another wave of foreign buyers on their way to buy up the balance of Vancouver real estate?
Continued demand for attached homes remains extremely high in Vancouver and the Fraser Valley. 54% of all sales recorded in the Valley were attached (townhomes and condominium) with inventory levels remaining very low in the attached properties for the entire region of Vancouver and Fraser Valley. The HPI (Housing Price Index) is still indicative of a very strong market with single-family prices at $976,000 for the Valley, an increase of 10.2% compared to August 2016. Townhomes are at $491,000, an increase of 16.6% since August 2016. While condominiums have seen the largest increase at a whopping 32.8% increase and a HPI price of $349,300. However, many of the single-family sub-areas of Vancouver are in a Buyer’s market on paper with STR (Sell Through Rate) numbers in the single digits. That being said, prices remain relatively stable. This may be the time to pick up a good seasonal purchase if you are in the market for a single-family home. There is more inventory to view and more sellers that may be getting anxious for an offer. The Fraser Valley single-family market is much more robust and a good home in a good area still has competing multiple offers in most cases.
Summer weather seems like it is here to stay, but before long the rains and cool weather will be upon us. Enjoy what is left of these beautiful days and watch for the direct flights into YVR. They certainly have a link to how the Vancouver and Fraser Valley real estate market trends.
Personal Real Estate Corporation
604-807-4366 or firstname.lastname@example.org
STR (Sell Through Rate) Formula = Sales ÷ Active Listings + Failed Listings + Sales