The past six months have seen the strongest sustained run in the Metro Vancouver housing market in a decade, a fact that May Real Estate Board of Greater Vancouver statistics (set for release shortly after deadline) will undoubtedly confirm.
Certainly, RBC Economics – for all its worries about affordability in Vancouver – isn’t doubting the market’s prospects.
“Demand-supply conditions in the Vancouver area are unequivocally favourable to sellers,” RBC economists Craig Wright and Robert Hogue wrote in their latest report. “Tight market conditions suggest that home prices are likely to keep increasing at an accelerating clip in the near term.”
With the board’s benchmark price for local residential properties topping $800,000 in the first quarter, watch for the headlines when it busts through the million-dollar mark – something it could well do by year’s end. Hand-wringing will likely increase, too, as affordability declines and people look for cheaper digs.
This is more than a case of mere supply, or “white flight,” a term some Chinese buyers have reportedly coined to describe what’s happening in Vancouver’s single-family neighbourhoods.
High prices in the core are a selling point for projects in outlying municipalities, where the cheaper end of the market embraces buyers of all colours and creeds. A case in point is Magusta Development (B.C.) Ltd.’s latest project, a 193-unit tower in Burquitlam billed as “the last great place to call home.” Sales ended last week, with units starting at $197,900 attracting “quite a few” first-time buyers from across the social spectrum, said Magusta vice-president John Gilmour.
Whether or not the millennial generation – those born since 1983 – are rejecting costly home ownership in Vancouver as many have claimed is another question, however.
A recent BC Real Estate Association report rejected the idea, pointing to 9.5% growth in the number of millennials in Vancouver proper between 2005 and 2015. This was in step with Vancouver’s growth within the region, and even a bit faster. Moreover, it ran counter to Vancouver’s long-term loss of population relative to the region as a whole. Millennials might be staying, but Vancouver isn’t where the growth is.
One reason that often surfaces in debates over the kind of housing Vancouver offers is that millennials decamp for locales that offer more space for their money when they have children.
This argument underpinned the presentation Brian Lee Crowley, managing director of the Macdonald-Laurier Institute in Ottawa, delivered at the most recent breakfast of commercial real estate association NAIOP.
Dissing bike-riding urban hipsters as far from the norm for Canada, Crowley argued that high-cost urban housing – fuelled by the high-density agendas of snobbish urban planning elites – is pushing people to the urban fringe.
“Suburbs and not cores are where the action is, and outer suburbs at that,” he said.
While the message seemed ideal for the Urban Development Institute membership of residential builders, Crowley said the diaspora of homeowners across the region put them in reach of the suburban industrial precincts (also pushed out by high land costs).
It was hardly the vision of compact communities envisioned in the region’s growth strategy. Complete communities don’t have to be dense; they just need good infrastructure that facilitates movement. It should have been no surprise that Crowley capped his presentation with something rarely heard in Vancouver: a paean of praise to the car, which “means people can access affordable space.”
Arguing that transit relies on nodes, Crowley said vehicles are ideal for traversing low-density cities with dispersed job growth. •