A Different Future for Vancouver Housing

Vancouver condo market | BCBusiness
According to real estate experts at the UDI luncheon, adding more supply to the market will help lower the currently escalated prices.

Despite some beliefs that escalating home prices have created a housing bubble, the Vancouver area real estate market is relatively balanced, experts say. But housing may look considerably different in future.

Okay, folks, relax. Vancouver is not in the middle of a housing market bubble.

But it is damned expensive. And it’s going to change to more condos, more rentals and more mixed-use nodes around transit stations.

This from the folks at the Urban Development Institute (UDI), who held their annual market forecast luncheon yesterday. UDI president Don Forsgren told 1200 senior development industry executives what everyone already knew – that housing affordability is at the “crisis” level in Vancouver.

Obviously, homes are unaffordable in Vancouver because there aren’t enough of them to meet the demand. Part of that is due to the unique circumstances that govern housing in the region, such as the fact that development can only go two ways – up in the city proper and east in the suburban areas.

Also land prices are high, and provincial taxes and municipal charges on new development hidden, so people don’t know how much various governments are taking out of the cost of a home, Forsgren added. “The era of shifting infrastructure costs on to new homebuyers must end,” he said.

Forsgren believes the only way to address the affordability problem is to put the housing demand/supply equation out of balance by tipping it toward the supply side. If more homes can be built than are needed, affordability will be improved, presumably because price escalation will slow down. To address this affordability problem, UDI is providing an online platform, More Homes for More People, where the public can join the discussion.

“We want everyone talking about the solutions to housing un-affordability, including community groups and special interests that often oppose our members’ developments,”  Forsgren said.

At the meeting, a panel of real estate industry leaders mostly agreed that the Vancouver region market will not see any great falls this year, but increases may slow down. Vancouver still looks good to them, but not as good as Toronto, which attracts more immigrants and has more room to expand. Any city tied to booming resource industries are also good bets, they said.

In Vancouver, they added, most new commercial and home building will cluster around transit lines and stations, because it is the only place were land use can be maximized.