Over the past 24 hours, the most popular article on Straight.com has concerned, of all things, quantitative easing.
Vancouver writer Ng Weng Hoong pointed out that he's been raising this issue since 2015. Despite this, quantitative easing has been utterly ignored by virtually everyone who writes about B.C.'s housing market in the media.
In a nutshell, quantitative easing is a term describing how central bankers buy huge amounts of government bonds and other financial assets in periods of low inflation to flood the economy with money.
Ng pointed out that the U.S. Federal Reserve "unleashed trillions of dollars into the world economy" this way following the global economic meltdown in 2008.
That lifted the dollar value of assets, including real estate, around the world.
"The Bank of Canada did not participate in the initial QE exercises, but it oversaw the doubling of the country’s domestic money supply between 2009 and 2019," Ng wrote.
Following that article, there's been another reference to the impact of quantitative easing, this time from Vancouver-based rennie intelligence.
In its monthly report released on March 12, it noted that in the past year, the Bank of Canada has embarked on aggressive quantitative easing in response to the economic contraction caused by the pandemic.
That drove bond yields and mortgage rates to historic lows.
In turn, this contributed to a record number of 4,493 new and presale townhome sales over the past year in Metro Vancouver. That 20 percent over the previous high set in 2016.
In addition, rennie intelligence reported that the 32,011 residential real-estate sales in the second half of 2020 marked the highest figure in history from July through December. The previous record for this period was set in 2015.
The Metro Vancouver housing market was on fire in 2020 even though immigration fell to 181,000, acccording to rennie intelligence.
That was just 53 percent of the federal government's 2020 target of 341,000 new permanent residents.
The government's three-year plan—created before the pandemic—calls for 351,000 new permanent residents in 2021, followed by an additional 361,000 permanent residents in 2022.
Those numbers have since been revised upward to more than 400,000 annually in 2021 and 2022.