BC Business
A (presumedly) high-priced home on Point Grey Road.
The housing situation in Metro Vancouver has reached a crisis point and government inaction is to blame, or so asserts a report from Simon Fraser University’s School of Policy that aims to sort out the many explanations for Vancouver’s recent escalation in home prices. The report, more cri de cœur than scientific study, concludes that the 30-per-cent year-over-year increase in sale prices in the region is caused primarily by a flow of foreign buyers, whose interest in Vancouver is abetted by lax tax policy and a provincial government that relishes their boost of regional economic activity.
“The dominant explanation for the crisis in Vancouver is a large and continuous flow of foreign money into the region, especially from China, which has reached unprecedented levels in the past year. This factor accounts for most of the crisis, on its own,” writes Josh Gordon, author of the report and adjunct professor of public policy at Simon Fraser—who is quick to build a case that restricting foreign ownership is not animated by xenophobic sentiment. And in a literature review of academic research and media coverage of Vancouver’s real estate market over the past decade, Gordon concludes that the spurt in buyers from China has had a far greater impact than other contributing factors such as low interest rates and the city’s geographic and political constraints on development (he deems the latter to be responsible for up to 30 per cent of the price surge, based on U.S. evidence).
Gordon also addresses what he considers poor explanations. The oft-cited reasons including a strong local economy, Vancouver’s desirability, and a lack of social housing investment have all played a negligible role in the crisis, he says.
Read elsewhereA “no” to Washington State coal. The U.S. Army Corps of Engineers has denied permits to a $700-million coal terminal proposed near Bellingham—a decision which could have implications for the backers of Port Metro Vancouver’s similar proposal. (Bellingham Herald)
No Martin Mars for Alberta. The B.C.-based owner of the iconic waterbomber has said that his 70-year-old plan will not be deployed to Fort McMurray, despite a effort on Facebook calling for its enlistment. (The Weather Network)