“So our market has shifted, but for how long?” The Fifth Dimension 2019 Spring Edition
Our aim is to provide a comprehensive, concise, informative and thought-provoking summary regarding new home sales, the majority of which are not recorded in MLS. Click here to download your copy of the Fifth Dimension.
To ensure the supporting data for this 2019 Spring edition is objectively collected and presented, we collaborate with highly regarded Urban Analytics (UA) a leading provider of advisory services on the new multifamily home market. UA has been tracking the new multifamily home market in Metropolitan Vancouver since 1994 and has been a vital contributor to this report since its inception in the First Quarter of 2010.
Undeniably, there has been a shift in our market – but for how long? According to Central 1 Credit Union Chief Economist, Helmut Pastrick at the Vancouver Real Estate Forum on April 4th, “The future holds even brighter times…Prices will double between 2016 and 2041” he added, “and it wouldn’t surprise me if that’s on the low side. The reason is simple: the region’s population is increasing, and densification is the name of the game in the Metro area as developers try to build more homes for more people. Throw in the effect of increased regulation and rising construction costs, from materials to labour, and there’s only one direction for prices to go over the long term”.
Here’s my question. Do we acknowledge that we are in a housing affordability crisis? Yes or No? The definition of crisis is “a time of intense difficulty, trouble, or danger”. If we are in a crisis then I have to ask: Are we collectively acting like it?
I do recognize we have issues to address with respect to housing and if we aren’t already in crisis mode, we seem to be heading there. To address this situation it requires both clarity and co-operation. I appreciate the perspective that local architects Gair Williamson and Chris Knight recently shared with Vancouver City Council. For starters, they stated “At one end of the spectrum is the dire situation of the city’s most vulnerable groups, who are unable to afford even the lowest market-rate rents (which themselves are NOT affordable!). At the other end of the spectrum, an out-of-control real estate market means that middle-income families can no longer expect to be able to buy a home, and market-rental rates are driving young families to other centres in the lower mainland or beyond. These are two very different problems which are all-too-frequently discussed in the same breath”. I agree and think we need to approach these as equally important yet separate issues.
Crisis can bring good. It has the potential to bring diverse people together to create positive change. Events like the flooding in eastern Canada this Spring or the Humboldt Broncos tragedy really do bring out the best of us with respect to compassion and support. It leaves me wondering if there isn’t a better way for our industry, the government and the general public to come together and create more integrated, unifying solutions. What do you think? Any ideas?
As always, feel free to share this report as widely as you see fit.
W. Scott Brown, President & CEO
Fifth Avenue Real Estate Marketing Ltd.
Listen to Scott each Friday at 6:45 a.m. on Sportsnet’s the Starting Line Up.