Anyone who’s been thinking about relocating to Vancouver — or anyone trying to find a place to live in B.C.’s largest city — can’t help but wonder about local real estate prices.

The current average price for a house in metropolitan Vancouver is nearly $800,000, according to the Real Estate Board of Greater Vancouver.

And if you’re hoping to live on Vancouver’s West Side, prepare to spend double that amount. Westside detached homes are now averaging almost $1.7 million.

With prices this high, perhaps it’s not surprising that a recent Globe & Mail article wondered, “Is Vancouver in a real estate bubble?”

Yet despite the headline, the article gives relatively little space to real estate price trends and much more ink to the effect of overseas buyers, particularly those from Asia, on Vancouver’s real estate market.

Of course, Vancouver’s popularity with wealthy Chinese investors isn’t news. The Globe & Mail piece acknowledges as much and argues that:

The torrid affair between eastern Asia and Vancouver real estate, now in its third decade, is actually a love triangle from which each party derives very different things.

When wealthy Chinese immigrants buy property in Vancouver—and they utterly dominate the top end of the market—they’re actually buying a form of insurance.

What the federal and provincial governments get out of these newly minted Canadians turns out to be a modern form of the infamous head tax that was imposed on Chinese migrants in the 19th century.

And what Vancouver gets is an economy that boasts a lot of froth, and not much substance.

Since Vancouver is consistently ranked among the best places in the world to live, perhaps it’s not surprising, as the Globe article says, that “Vancouver is popular as a lifestyle destination for those who can afford it—not as a place to make a living. More ambitious immigrants, Asian and otherwise, are more likely to choose Toronto.”

In fact, British Columbia (which essentially means Greater Vancouver) receives about 15% of all Canadian immigrants, which, given its population, is only slightly more than its proportional share.

On the other hand, it gets about half of the annual 10,000 or so people who can prove they are already wealthy and therefore eligible for easier, if more expensive, rides in the entrepreneur and investor classes. And the rest of Vancouver’s 15% share fits a distinctly different profile than do immigrants to places like Toronto and Montreal: more skilled and better educated, and much less likely to arrive as refugees.

Perhaps Vancouver is becoming such a cool place to live that — as in other high-priced cities like New York or Paris — people will squeeze into ever-tinier spaces to live the “Vancouver lifestyle.”

What do you think? Is the Vancouver real estate market in a “bubble” that’s going to burst?

Or will Vancouver continue to be a wildly popular place to live, regardless of the housing costs?

Leave a comment and let us know. And please post tips for newcomers to Vancouver who are looking for an affordable place to live! Thanks.

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UPDATE: According to the RE/MAX Housing Market Outlook 2011, residential home prices are expected to climb further across Canada in the coming year. In addition, “Markets in British Columbia are forecast to lead the country in terms of percentage increases in sales activity next year, with Greater Vancouver expected to climb 10 per cent…” Bubble or not?

Vancouver house photo by pnwra (flickr)