{"id":794,"date":"2016-12-16T21:56:48","date_gmt":"2016-12-16T21:56:48","guid":{"rendered":"http:\/\/www.chrisbrownrealestate.ca\/blog\/?p=794"},"modified":"2016-12-16T21:59:25","modified_gmt":"2016-12-16T21:59:25","slug":"home-prices-jumped-40-per-cent-in-vancouver-where-are-all-the-cranes","status":"publish","type":"post","link":"https:\/\/www.chrisbrownrealestate.ca\/blog\/home-prices-jumped-40-per-cent-in-vancouver-where-are-all-the-cranes\/","title":{"rendered":"Home prices jumped 40 per cent in Vancouver. Where are all the cranes?"},"content":{"rendered":"
\"the-residences-interior-dining-lg\"<\/a>

The Residences at Lynn Valley by Bosa Development.<\/p><\/div>\n

When something becomes more expensive, people will produce more of it. According to that pillar of Econ 101, new homes should be springing up all over Vancouver. Which they aren\u2019t.<\/p>\n

The property market on Canada\u2019s West Coast is one of the world\u2019s hottest, or most unhinged, depending on your perspective. From local tech whizzkids to wealthy Chinese scouting for safe havens and investors just seeking returns on a quick flip, demand for Vancouver houses seems endless. Meanwhile, thanks to strict land-use rules and lobbying by existing homeowners, supply has stalled.<\/p>\n

\u201cWhen you have a 40-per-cent increase in prices in a year, the skyline should be absolutely saturated with cranes,\u201d said Thomas Davidoff, head of the University of British Columbia\u2019s Centre for Urban Economics and Real Estate. \u201cThat\u2019s not what you see in Vancouver.\u201d<\/p>\n

What you see instead is the shortest list of houses for sale in almost a decade, even as the price of a typical single-family house surged to $1.5-million, about 20 times what the median household earns in a year.<\/p>\n

Wrong direction?<\/strong><\/p>\n

Vancouver isn\u2019t the only place in the world, or even in Canada, where house prices have soared beyond the reach of residents: It\u2019s happening in the global economy\u2019s poster-towns, such as London and San Francisco, and in less-feted Auckland, Stockholm and Toronto, too. A common thread that links such cities is curbs on the availability of land for building. Yet as the Vancouver boom turned into a crisis of affordability, and authorities moved to tackle the problem, housing supply wasn\u2019t the direction they were looking.<\/p>\n

In August, the province of British Columbia imposed a 15-per-cent tax on foreign buyers, and in October, the federal government tightened rules on mortgage eligibility. Those steps had some success in cooling the market \u2013 but not in a good way, according to Cameron Muir, chief economist at the British Columbia Real Estate Association. That\u2019s because measures aimed at capping demand also send a signal to developers and builders to slow down, he said. \u201cAddressing the supply side is not only beneficial for housing affordability in the long term, but it adds these great things called jobs in the economy, and growth,\u201d Mr. Muir said. \u201cWeakness in demand is not that helpful. If home prices don\u2019t rise as rapidly because you can\u2019t afford to buy a home, would you call that an increase in affordability?\u201d<\/p>\n

Toronto is also struggling with housing supply: The number of low-rise homes built last year in Canada\u2019s financial hub was the lowest since 1995. The city is encircled by a green belt of almost two million acres that\u2019s under permanent protection, and has experienced a price run-up similar to, though not as steep as, the one in Vancouver.<\/p>\n

In fairness to those in charge of planning for Vancouver and Toronto, they must be doing something right. Both cities are consistently ranked among the most world\u2019s most livable, even if such lists sometimes skate over the question of affordability. Building curbs help to contain urban sprawl and promote greener development. In Vancouver\u2019s case, there are physical constraints, too: It\u2019s encircled by water and soaring mountains.<\/p>\n

Still, an unchecked real estate boom risks turning it from a working city into a playground for tourists and the wealthy elite \u2013 a \u201clifestyle bubble,\u201d as consultant Deloitte Monitor warned in a study for Vancouver\u2019s port authority last year.<\/p>\n

A shortage of land is an odd predicament for Canada, the world\u2019s second-largest country and one of the least densely populated. Of course, space is scarcer in the Toronto and Vancouver metropolitan areas, home to nearly a quarter of the 35-million population. Still, local rules exacerbate the problem.<\/p>\n

Farms or mansions?<\/strong><\/p>\n

Almost a quarter of Metro Vancouver\u2019s land base is set aside for agricultural use. When The Globe and Mail investigated such plots last month, it found many of them occupied by luxury mansions whose owners benefit from tax breaks meant for farmers. The Ministry of Community, Sport and Cultural Development, which oversees property assessments, said in an e-mail that it\u2019s \u201ccarefully reviewing the report\u201d and wants to \u201censure that our policies support the goal of encouraging farming on agricultural land.\u201d<\/p>\n

In the areas that are available for housing, strict zoning applies. About 65 per cent of Vancouver is designated primarily for single-family houses, according to Anne McMullin, president of the Urban Development Institute. Anyone driving into the city probably won\u2019t see much high-rise until they get near the central business district.<\/p>\n

Vancouver has only about half as many people per square kilometre as Barcelona, according to data from Demographia, yet despite their increasingly long commutes its residents vehemently oppose condominium developments. Last year, they voted down a $7.5-billion public transit plan that would have led to greater densification.<\/p>\n

What few residential high-rise buildings there are mostly contain the tiny one and two-bedroom apartments favoured by investors \u2013 many of whom don\u2019t live in them.<\/p>\n

An estimated 20,000 homes in the city are believed to remain vacant throughout most of the year, lights out and shades down, prompting Mayor Gregor Robertson to announce a new tax on absentee landlords starting January.<\/p>\n

\u2018Essentially rigged\u2019<\/strong><\/p>\n

Family-friendly townhouses and three-bedroom apartments are \u201clike unicorns\u201d because developers have zero incentive to build them, UBC\u2019s Mr. Davidoff said.<\/p>\n

It can take years to get rezoning agreements for a major project, and the red tape adds about 20 per cent to final costs, according to the Urban Development Institute. \u201cIn every jurisdiction, the approvals are taking longer,\u201d said Brian McCauley, president of Concert Properties Ltd., which builds in both Vancouver and Toronto. \u201cYou\u2019re bumping up against existing communities where there is a fear of change. There is a political reality of nimbyism.\u201d<\/p>\n

Last year, the owner of a typical single-family house in Vancouver watched their net worth grow by more than $1,000 a day. If it\u2019s their primary residence, homeowners don\u2019t get taxed on the gains. It all adds up to a market that\u2019s \u201cessentially rigged,\u201d said Wendell Cox, a senior fellow at the Frontier Centre for Public Policy who\u2019s surveyed housing affordability around the world for more than a decade. \u201cIt\u2019s structured so that house prices go up.\u201d<\/p>\n

Read more:\u00a0http:\/\/www.theglobeandmail.com\/real-estate\/vancouver\/home-prices-jumped-40-per-cent-in-vancouver-so-where-are-all-the-cranes\/article33308460\/<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

When something becomes more expensive, people will produce more of it. According to that pillar of Econ 101, new homes should be springing up all over Vancouver. Which they aren\u2019t. Meanwhile, thanks to strict land-use rules and lobbying by existing homeowners, supply has stalled.<\/p>\n","protected":false},"author":2,"featured_media":795,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false,"footnotes":""},"categories":[118,59,20],"tags":[304,305],"class_list":["post-794","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-city-planning","category-market-update","category-neighbourhood-stories","tag-more-homes-for-more-people","tag-more-homes-needed"],"_links":{"self":[{"href":"https:\/\/www.chrisbrownrealestate.ca\/blog\/wp-json\/wp\/v2\/posts\/794"}],"collection":[{"href":"https:\/\/www.chrisbrownrealestate.ca\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.chrisbrownrealestate.ca\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.chrisbrownrealestate.ca\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.chrisbrownrealestate.ca\/blog\/wp-json\/wp\/v2\/comments?post=794"}],"version-history":[{"count":1,"href":"https:\/\/www.chrisbrownrealestate.ca\/blog\/wp-json\/wp\/v2\/posts\/794\/revisions"}],"predecessor-version":[{"id":797,"href":"https:\/\/www.chrisbrownrealestate.ca\/blog\/wp-json\/wp\/v2\/posts\/794\/revisions\/797"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.chrisbrownrealestate.ca\/blog\/wp-json\/wp\/v2\/media\/795"}],"wp:attachment":[{"href":"https:\/\/www.chrisbrownrealestate.ca\/blog\/wp-json\/wp\/v2\/media?parent=794"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.chrisbrownrealestate.ca\/blog\/wp-json\/wp\/v2\/categories?post=794"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.chrisbrownrealestate.ca\/blog\/wp-json\/wp\/v2\/tags?post=794"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}