Will Vancouver's house prices ever stop rising?
Vancouver is reaching the outer limits of conceivable pricing for home buyers. That view, expressed recently by Business Council of B.C. executive vice-president Jock Ferguson, reflects the sentiments of many.
However, similar observations have been made in the past. Still, the cost of housing in the Vancouver area has kept climbing. It is impossible to predict when the pricing peak truly will be reached.
Greater Vancouver’s January home price index for a single detached home hit a record $1,010,000, up 8.4 per cent from one year earlier.
The rental market is equally daunting, with a low vacancy rate and hefty rents, especially for condo units.
Behind the problem of unaffordability is, and always has been, the law of supply and demand. There is no indication this force soon will be diminishing.
Greater Vancouver is attracting tens of thousands of newcomers a year, both from other countries and provinces.
For wealthy foreign migrants, the housing situation likely poses no obstacle. But most local buyers and renters, and migrants from other provinces, are not in a position to pay high rents or $1 million-plus to purchase.
Influential architect Michael Geller recently played host to a Simon Fraser University lecture, titled: 12 Affordable Housing Ideas For Vancouver. Unsurprisingly, it was so well attended that many would-be registrants were turned away.
Geller is calling for a two-pronged approach that would:
• have those wishing to live here reducing expectations about the size of housing they require and their need for two-car garages and granite countertops;
• have city planners become more creative and flexible with zoning, and building rules and regulations.
Specifically, Geller wants Vancouver-area planning departments to permit designs that maximize land use and have been tried successfully elsewhere.
Designs would, for example, allow construction of a cluster of small cottage-like homes on a single large residential lot; and designs that would extend construction of a house or apartment building's right to side-lot property lines, as in dense European urban cores. Municipalities could more liberally permit construction and sale of micro suites of 300 to 400 square feet, laneway and coach houses and allow townhouses and duplexes to accommodate basements, which then could be rented as crucial mortgage helpers.
The city of Vancouver is well aware it has a severe housing affordability problem, having established an arm’s length affordable housing agency in 2014 to find ways of supplying more housing at more reasonable prices.
But the agency has yet to launch a much-needed public discussion about innovative proposals such as Geller’s. The public deserves a chance to digest the prospect of further densification.
Early action clearly is needed in the face of the ever-escalating property prices.
Source: Editorial, Vancouver Sun