{"id":12358,"date":"2019-05-02T11:11:05","date_gmt":"2019-05-02T18:11:05","guid":{"rendered":"http:\/\/www.roryc.ca\/blog\/?p=12358"},"modified":"2019-05-02T10:19:19","modified_gmt":"2019-05-02T17:19:19","slug":"theres-only-one-direction-for-home-prices-to-go-up","status":"publish","type":"post","link":"https:\/\/www.roryc.ca\/blog\/2019\/05\/theres-only-one-direction-for-home-prices-to-go-up\/","title":{"rendered":"There&#8217;s Only One Direction for Home Prices to Go : UP!"},"content":{"rendered":"<p style=\"text-align: justify;\"><strong>Prices will double<\/strong><\/p>\n<p style=\"text-align: justify;\">Ten consecutive months of declines in the Real Estate Board of Greater Vancouver\u2019s benchmark home price have brought the figure down 7.5% since last May to $1,011,200. Sales are also down, with March seeing the lowest tally in 33 years. On the bright side, this was the smallest monthly decline of the year, and the strongest month for sales since October, when the board reported 1,966 transactions.<\/p>\n<p style=\"text-align: justify;\">The future holds even brighter times, Central 1 Credit Union chief economist Helmut Pastrick told the Vancouver Real Estate Forum on April 4.<\/p>\n<p style=\"text-align: justify;\">\u201cPrices will double between 2016 and 2041,\u201d he said. \u201cAnd it wouldn\u2019t surprise me if that\u2019s on the low side.\u201d<\/p>\n<p style=\"text-align: justify;\">The reason is simple: the region\u2019s population is increasing, and densification is the name of the game in the Lower Mainland as developers try to build more homes for more people. Throw in the effect of increased regulation and rising construction costs, from materials to labour, and there\u2019s only one direction for prices to go : UP.<\/p>\n<p style=\"text-align: justify;\"><strong>Not government\u2019s job<\/strong><\/p>\n<p style=\"text-align: justify;\">Rising prices mean scant hope of an end to the region\u2019s affordability crisis, but as a recent presentation to the Urban Development Institute (UDI) noted, Metro Vancouver isn\u2019t special.<\/p>\n<p style=\"text-align: justify;\">Jonathan Woetzel, a senior partner with McKinsey &amp; Co. in Shanghai and leader of the consulting firm\u2019s Cities Special Initiative, told the UDI audience in February that, by 2025, a third of all city dwellers, or about 1.6 billion people, will face inadequate housing worldwide.<\/p>\n<p style=\"text-align: justify;\">\u201cThat\u2019s a combination of people who just can\u2019t find housing, there isn\u2019t housing there for them, and people who have to pay too much for housing,\u201d he explained. \u201cSo Vancouver, you\u2019re not alone.\u201d<\/p>\n<p style=\"text-align: justify;\">Plugging the gap will require about $650 billion in housing.<\/p>\n<p style=\"text-align: justify;\">It\u2019s money the public shouldn\u2019t expect government to spend, BC Housing CEO Shayne Ramsay told CBRE Ltd. executive vice-president and managing director Norm Taylor in conversation following Helmut Pastrick\u2019s presentation at the Vancouver Real Estate Forum.<\/p>\n<p style=\"text-align: justify;\">\u201cGovernment can\u2019t spend its way to create the rental housing that\u2019s needed,\u201d he said, noting that social housing \u2013 the core of BC Housing\u2019s mandate \u2013 makes up 6% to 8% of the housing stock. \u201cIt\u2019s really the private-sector development that\u2019s going to be needed.\u201d<\/p>\n<p style=\"text-align: justify;\">Reducing approval times and creating an attractive tax environment are how government can help private builders deliver the housing that\u2019s needed.<\/p>\n<p style=\"text-align: justify;\">BC Housing, for its part, stepped up to finance a 135-unit condo project Chard Development Ltd. is building in Victoria. The arrangement lets owners buy at 8% below prevailing market prices (if they commit to live in the units for at last two years), then reinvest the equity in their next home.<\/p>\n<p style=\"text-align: justify;\"><strong>Will buyers buy?<\/strong><\/p>\n<p style=\"text-align: justify;\">With home sales through the Real Estate Board of Greater Vancouver running at least 30% below last year, buyers\u2019 fears are palpable. So are the concerns of industry professionals.<\/p>\n<p style=\"text-align: justify;\">CBRE\u2019s Taylor noted that Altus Group indicates the proportion of first-time homebuyers in Vancouver expecting to buy in the next year is 8%, down from an optimistic 14% a year ago.<\/p>\n<p style=\"text-align: justify;\">Similarly, a February report for Re\/Max by market research firm L\u00e9ger found that even singles with low debt levels and the means to buy are reticent to purchase because of high prices and economic angst.<\/p>\n<p style=\"text-align: justify;\">A week earlier, pollster Angus Reid reported that buyers were more willing to ignore debt in order to leave their parents, cleave to a spouse and have kids than to buy a house (in that order). But as obligations grow, a Mustel Group survey for Sotheby\u2019s International Realty Canada noted that buyers find it harder to save up to buy a residence.<\/p>\n<p style=\"text-align: justify;\">Ultimately, one clear conclusion from the survey data is that single buyers lack confidence and families lack affordable product. Developers may not be able to address the former, but they must heed the latter. \u2022<\/p>\n<p style=\"text-align: justify;\"><a href=\"https:\/\/biv.com\/article\/2019\/04\/residential-price-drop-failing-ease-vancouvers-housing-crisis\" target=\"_blank\" rel=\"noopener noreferrer\">Residential Price Drop Failing to Ease Vancouver&#8217;s Housing Crisis<\/a> by Peter Mitham | Business in Vancouver<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Prices will double Ten consecutive months of declines in the Real Estate Board of Greater Vancouver\u2019s benchmark home price have brought the figure down 7.5% since last May to $1,011,200. &hellip; [<a href=\"https:\/\/www.roryc.ca\/blog\/2019\/05\/theres-only-one-direction-for-home-prices-to-go-up\/\">read more<\/a>]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8],"tags":[],"class_list":["post-12358","post","type-post","status-publish","format-standard","hentry","category-market-updates"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.7 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>There&#039;s Only One Direction for Home Prices to Go : UP! 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