Vancouver is unique as a big city in Canada in many ways, but it’s also unique in a very geographical sense too compared to other major metropolitan cities like Toronto and Calgary. Urban sprawl is able to happen more naturally because the cities have the capacity to grow outwards. Vancouver has no such ability, with mountains to the North, the ocean to the West, and the US border to the south.
Growth out into the Fraser Valley past Chilliwack has occurred, but much of this ALR farm land and that’s the way it should be. This means expansive new housing builds are challenging, and a big part of why housing is so expensive in Vancouver.
Now if you’re a realtor in Vancouver, it can certainly be feast or famine as the expression goes. This is very true if you’re a newly licensed realtor who is keen to make a name for themselves as speedily as possible. Our online real estate lead generation system is a proven effective way to build up your client base more effectively than just standard approaches, and it’s done a lot of good for many realtors like you who now enjoy a larger client base because of it. If you need listings, you really should consider Real Estate Leads.
But enough with the self promotion end, we’re going to talk more about why the housing problem and high prices for real estate are almost certain to continue long-term for the city of Vancouver.
All-Continent Unaffordability
A report recently indicated Vancouver as being North America’s least affordable city, and local real estate professionals say that won’t be any different in the future. The only way it will be different according to many experts is if wholesale investment is made to increase the city’s housing supply.
Vancouver saw a 0.98% population rise last year of roughly 25k people, and it’s been reported the city intends to add 1 million new residents by 2050. That works out to 34,482 annually over the next 29 years.
Only some 11k new homes are being built in the city on average these years. Would be fine for a smaller city, but it’s painfully inadequate for Vancouver. But somewhat in the defence of the city, where can builds be approved for zoning and construction when the land for it just isn’t in existence. It’s not that it’s not available, it really is that it’s just not there.
It doesn’t take a mathematician to figure that 11k homes for 34+ thousand newcomers each year plus domestic demand and we can be certain that housing prices are going to continue to be pushed because demand is going to WAY outstrip supply. That works out to about 18 people in each of those new homes. Surely this is not what multi-family dwelling is or was intended to mean.
Is that good news for homeowners building equity in their homes? Absolutely it is, but it makes difficult for first time homebuyers to get into the market and as a realtor these are very valuable clients to have and usually they are also really rewarding to work with.
Upwards Pressure
This chronic supply and demand imbalance puts upward pressure on the cost of housing. There’s been historically low-interest rates for a long time now and that has enabled purchasing activity in the Vancouver real estate market that hasn’t really been seen before. The average sales price of a Vancouver home in 2020 went up by 11.4% to $1,270,000 from $1,140,000 in 2019. Then add to that an additional increase of 4% to $1,320,800 that is foreseen for this year.
Canada Mortgage and Housing Corporation figures showed 21,141 housing starts in Vancouver in 2019 and 22,371 for 2020 but only 950 new homes registered in Vancouver in April of this year. Experts say this rate indicates servicing just 10-20% of demand at present, and if this number goes lower it will be reflected in an even hotter housing market in Vancouver.
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