As the dog days of summer roll on and become shorter the most overused word (possibly with the exception of “unprecedented”) is “crisis”. The second favorite topic of conversation across the country is “unaffordable housing” with the word crisis often thrown in. Then there follow all the suggested solutions – severely tax foreign buyers, ease the ‘stress test’ for mortgage applicants, increase the capital gains tax, incentivize 1st time home buyers with government funds, ban “blind bidding” etc. etc. on and on….
This is the one “crisis” with an obvious solution which has become significantly clearer over the past 18 months. Brisk sales during this time have revealed that during this time of escalating prices, our buyers have been local – foreign buyers almost non existent (unless you count those from far off eastern Canadian provinces!) and our team has seen no ‘flippers’. These buyers were local residents reassessing their priorities as they had time to reflect on their lives – missing family in other parts of the country, working from home, longing for a quieter lifestyle, – a myriad of very personal reasons. Yet – prices increased and people continued to buy – competing with each other to purchase what they wanted.
The one consistent problem:- a significant and dwindling inventory – now at an all time low. So…it is our cities and municipalities who have the solution at hand – swifter decisions (even well thought out efficient designs & standards can be streamlined by using the wealth of expertise of city staffs) and timely permits to follow. Politics often stand in the way of progress and residents who want things to stay the same as our population grows at an exponential rate.
When we talk about “affordable housing” we are often talking about different aspects of housing. The above is all about owning your own home – what about renters? When it comes to purpose built affordable rentals and/or subsidized housing, Government must play a leading role, which they have not done in any significant way since the 1970s. These are the residents who need to see truly affordable housing. Cooperation between willing developers and Government entities like BC Housing – often freeing up provincial or municipal land – make these necessary projects work. Yes, it is our taxes at work, but so too are the bureaucratic interim solutions with no legacy to follow.
Back to the supply and demand issue:- Keith Stewart, economist for The Real Estate Board of Greater Vancouver states that our market is “undersupplied”. He goes on “Housing supply is the biggest factor impacting the market right now. To help relieve pressure on prices and improve peoples’ buying options, the market needs a more abundant supply.”
So there you have it. Look for the permanent real solutions from the politicians looking for your vote.
Our team has been immersed in the real estate business for long enough to know that the market has its own peaks and valleys – generally related to interest rates and inventory, but we also know that the optics of a government decision can cause unintended consequences.
Confused? We are happy to clarify the data and our thoughts any time – and these are interesting times!
Enjoy a great long weekend. We remain your long time partners in real estate. Generations Real Estate Partners:- Michelle Hawthorne, Scott Johnson, Ray Harris, Shane Goutsis and Sheila Francis.