BC Business
Vancouver Real Estate Forum
While there are reasons for optimism in the sector, enthusiasm is curbed
Clouds were looming both inside and outside the Vancouver Convention Centre for much of the morning and afternoon on Wednesday, April 5.
The gloom and doom was due to the Vancouver Real Estate Forum, which jam-packed the Convention Centre with grey and blue suits.
It was one of three important real estate events happening on the day, as the UBCM Housing Summit took place several blocks south at the Wall Centre while people were being evicted from the campsites eastward on Hastings Street by Vancouver Police officers.
Here were some takeaways that we gathered from the event.
1. Ken Sim’s absence was some grim irony
Scheduled as one of the main speakers on the day, Vancouver Mayor Ken Sim reportedly cancelled on very short notice. Instead, he sent councillor Sarah Kirby-Yung to represent Vancouver City Council.
There was no secret where Sim was, though. Almost exactly when the mayor was supposed to take the stage with his Surrey counterpart Brenda Locke to talk about how the two cities are welcoming development, Sim was doing a press conference at City Hall about ordering the VPD to take down encampments on East Hastings Street.
The irony of missing a conference at which you’re supposed to tell developers that you’re open for business because you’re announcing a campaign to clear out the poorest part of the city? Don’t think a knife is cutting through that.
2. Surrey makes a play
Surrey Mayor Brenda Locke, on the other hand, was ready to rock. Locke admitted that there was great pressure on Surrey to keep building to become one of the country’s biggest cities.
Locke gave out her number to the attendees—yes, she literally rattled off her telephone number—and implored them to call it if they encountered any trouble in trying to build in her city.
3. BMO tries to stay optimistic
BMO’s deputy chief economist and head of U.S. economics Michael Gregory gave a general overview of the real estate sector in Canada and the U.S. He did his best to put a positive spin on the current situation by remarking that inflation had begun to moderate with commodity prices lowering and supply bottlenecks being straightened out.
Gregory also predicted that the Bank of Canada won’t raise interest rates this year and will look to lower them. That’ll be encouraging for many, though it should be noted that Gregory essentially said that stress tests for mortgages worked. In the wake of the highest rate hikes in over a decade, he said, people had managed to survive, even if they had to pull back on some spending.
4. Ravi Kahlon impresses the crowd
David Podmore, CEO of Vancouver-based Concert Properties, interviewed B.C. Minister of Housing Ravi Kahlon in a pre-taped interview that was aired on a large screen at the conference.
Kahlon stressed the need for more housing development and talked up the BC Builds program, which he says will use government lands to build more housing for the middle class. “It won’t be easy, no jurisdiction in North America is doing what we’re doing,” said Kahlon.
Podmore seemed impressed by Kahlon and told BCBusiness afterwards that it was encouraging to hear him talk about the need for the government to work with the private sector to build on public land.
5. Building multi-family homes is pivotal… and hard
A panel entitled “Preparing for an influx of new residents: Is the multi-residential market ready? What opportunities exist for investment?” was decidedly a bloodbath.
“It’s a crisis, a full-blown crisis, and it didn’t happen yesterday,” said Capreit CEO Mark Kenney in a sentence that more or less described how the entire panel of four felt. “The best time to plant a tree was 30 years ago, that’s where we are. Everybody wants to live here—we need the capacity to do that.”
Brad Jones of Vancouver-based Wesgroup Properties emphasized that things needed to change on a local scale, and quickly. “There were five areas directly around transit stations that lost population from 2015, including Commercial-Broadway…that’s a travesty,” he said.
Perhaps unsurprisingly, the group rallied against taxation on developers and hammered home the need for incentives.
“There’s never been example on the planet Earth where additional taxes helped build more housing,” said Kenney. “Tax incentives did give rise to the biggest wave of housing Canada has seen. Now we have all these taxes at a time when we need housing. Why take aim at those building housing? Let the private sector build all the hosing we need—they have to leverage existing markets.”
6. The office market remains uncertain
A panel focused on office market analysis was perhaps the bleakest of all. It started with moderator recalling what the 2019 office market looked like and playing a party clip from The Wolf of Wall Street.
The general consensus among panellists was that, optimistically, the office market could rebound in 2027. Yeah. For Vancouver, which has seen higher office vacancies lately than at any time in a long while, it’s a hard conversation to have.
Julie De Cotiis, vice president of leasing at Triovest, may have said it best: “I’d rather be building industrial.”
7. There’s optimism around this provincial government, but…
It wasn’t just Kahlon who inspired confidence. “This Premier understands the housing agenda more than anyone I’ve dealt with in 30 years,” said Ward McAllister, CEO of Vancouver-based Ledingham McAllister. “He understands the housing agenda, it’s important to him. He need to put aside ideology and deal with the problem at hand. There are 150,000 people coming to this province and nowhere for them to live.”
Added McAllister: “The average person on the street thinks the government is actually building housing, that they’ve got guys with steel-toed boots going to construction sites in the morning. But it’s actually the people here at this conference that do it.”