The real problem with Vancouver’s outrageous house prices

[WarrenC12]

Originally Posted by BaddieB

The housing crisis is the best example of why centrally planned economies are doomed to fail. Who would have known that putting our tax burden on new home buyers would cause housing prices to soar!

Is that the sole cause of home price increases?

[BaddieB]

High immigration levels too, although if we had no zoning and housing restrictions it wouldn't be a problem. The Phoenix Metro grew by 30% to 50% per decade from the 80s to the 2010s, and housing remained dirt cheap (at least compared to Vancouver) by printing houses by the millions. I'm very against sprawl, and we shouldn't sprawl in Vancouver to build housing, but increasing supply above demand makes housing affordable. The current dynamic of imposing prohibitive fees and taxes, and heavily restrictive zoning, on new housing is the problem above anything else. Weird how the only people to address this are the BCNDP.

[Changing City]

Originally Posted by BaddieB

High immigration levels too, although if we had no zoning and housing restrictions it wouldn't be a problem. The Phoenix Metro grew by 30% to 50% per decade from the 80s to the 2010s, and housing remained dirt cheap (at least compared to Vancouver) by printing houses by the millions. I'm very against sprawl, and we shouldn't sprawl in Vancouver to build housing, but increasing supply above demand makes housing affordable. The current dynamic of imposing prohibitive fees and taxes, and heavily restrictive zoning, on new housing is the problem above anything else. Weird how the only people to address this are the BCNDP.

So extraordinarily low interest had no impact on rising prices?

[BaddieB]

That too, although low interest rates should have spurred a massive boom in housing development too (which would have boosted supply) but that didn't really happen. Let's compare starts over the years housing starts in Metro Vancouver

2017 - 26k
2018 - 23k
2019 - 28k
2020 - 22k
2021 - 26k
2022 - 28k
2023 - 33k
2024 - 30k (12.5k in the first 5 months)

Wow, looks like low interest rates didn't do that much to boost housing development. There was a boost, but nothing too significant. Probably because of all the aforementioned restrictions on new housing. Over 100k people moved to Vancouver in 2023, 30k new units is nothing.

If we have created an environment where low interest rates and high immigration aren't doing much to boost supply enough, I blame restrictions on new housing above anything else (not that other factors don't play into the housing crisis, it's just restrictions on housing that play the biggest role).

[chowhou]

Originally Posted by BaddieB

That too, although low interest rates should have spurred a massive boom in housing development too (which would have boosted supply) but that didn't really happen. Let's compare starts over the years housing starts in Metro Vancouver

2017 - 26k
2018 - 23k
2019 - 28k
2020 - 22k
2021 - 26k
2022 - 28k
2023 - 33k
2024 - 30k (12.5k in the first 5 months)

Wow, looks like low interest rates didn't do that much to boost housing development. There was a boost, but nothing too significant. Probably because of all the aforementioned restrictions on new housing. Over 100k people moved to Vancouver in 2023, 30k new units is nothing.

If we have created an environment where low interest rates and high immigration aren't doing much to boost supply enough, I blame restrictions on new housing above anything else (not that other factors don't play into the housing crisis, it's just restrictions on housing that play the biggest role).

You're falling for the conversation tree. Cue: "The real reason is there just aren't enough construction workers".

It really is a shame, everyone has their own pet reason for why housing is expensive, but you can respond to pretty much all of them with "That wouldn't be an issue if we deregulated the municipal housing supply management system."

Immigration driving demand? Wouldn't be a problem if we allowed more houses.
Foreign money driving demand? Wouldn't be a problem if we allowed more houses.
Low interest rates driving demand? Wouldn't be a problem if we allowed more houses.

[whatnext]

Originally Posted by chowhou

You're falling for the conversation tree. Cue: "The real reason is there just aren't enough construction workers".

It really is a shame, everyone has their own pet reason for why housing is expensive, but you can respond to pretty much all of them with "That wouldn't be an issue if we deregulated the municipal housing supply management system."

Immigration driving demand? Wouldn't be a problem if we allowed more houses.
Foreign money driving demand? Wouldn't be a problem if we allowed more houses.
Low interest rates driving demand? Wouldn't be a problem if we allowed more houses.

I agree that all those things you listed contribute to increased prices but we physically can't just build "more houses" (or condos) that easily. And as we've seen with the sorry state of the healthcare system, there are other areas that are impacted by bringing in more people with no plans how to service them.

[chowhou]

Originally Posted by whatnext

I agree that all those things you listed contribute to increased prices but we physically can't just build "more houses" (or condos) that easily. And as we've seen with the sorry state of the healthcare system, there are other areas that are impacted by bringing in more people with no plans how to service them.

It's crazy how the rest of the world seems to have it figured out, but I guess we Canadians are just too weak and dumb.

[BaddieB]

Even the argument of there being a shortage of construction workers can be answered by "that wouldn't be an issue if we deregulated the municipal housing supply management system", as the savings from not paying as much in taxes, fees, land assemblies, etc could be passed on to boosting construction worker pay, and lower housing prices would allow more working class people to live here.

Allow 6 storey infill anywhere by right, abolish affordable unit or social housing requirements (Governments should be building that, not new home buyers), and fund new infrastructure by allowing fees like DCCs and ACCs with the requirement that they pay no property taxes for 5 to 10 years. Tie immigration to net new housing too.

[BaddieB]

Originally Posted by whatnext

I agree that all those things you listed contribute to increased prices but we physically can't just build "more houses" (or condos) that easily. And as we've seen with the sorry state of the healthcare system, there are other areas that are impacted by bringing in more people with no plans how to service them.

Somehow Phoenix was able to do it. There's no "physical" limit, just economic ones.

[Changing City]

Originally Posted by BaddieB

That too, although low interest rates should have spurred a massive boom in housing development too (which would have boosted supply) but that didn't really happen. Let's compare starts over the years housing starts in Metro Vancouver

2017 - 26k
2018 - 23k
2019 - 28k
2020 - 22k
2021 - 26k
2022 - 28k
2023 - 33k
2024 - 30k (12.5k in the first 5 months)

Wow, looks like low interest rates didn't do that much to boost housing development. There was a boost, but nothing too significant. Probably because of all the aforementioned restrictions on new housing. Over 100k people moved to Vancouver in 2023, 30k new units is nothing.

If we have created an environment where low interest rates and high immigration aren't doing much to boost supply enough, I blame restrictions on new housing above anything else (not that other factors don't play into the housing crisis, it's just restrictions on housing that play the biggest role).

But there are literally tens of thousand of rental and strata units already approved for development across the whole of Metro Vancouver. So the 'restrictions' argument being 'the explanation' doesn't hold water either.

All those extra people moving here should have seen those developments that are still unbuilt, started. So all those other factors must be a part of the explanation (including labour availablity, material shortages and costs, financing costs, demand for units at the prices developers are willing to build at, less demand for investment units now Airb&b is limited, fewer foreign buyers, fewer 'pied-a-terre' owners etc. etc.)

[whatnext]

Originally Posted by BaddieB

Somehow Phoenix was able to do it. There's no "physical" limit, just economic ones.

This Phoenix?

Arizona's housing crisis is only getting worse, experts say
Experts say high prices and high interest rates are making it difficult for many Arizona.ns to buy a home

Why It’s So Expensive to Live in Phoenix
Arizona is a presidential election battleground state, and a dire shortage of affordable housing there is sowing economic anxiety among voters.

Navigating the Arizona Housing Crisis: Millennials struggle to afford the American Dream
Exploring barriers for young buyers amidst soaring prices and dwindling inventory.

[BaddieB]

Originally Posted by Changing City

But there are literally tens of thousand of rental and strata units already approved for development across the whole of Metro Vancouver. So the 'restrictions' argument being 'the explanation' doesn't hold water either.

Wat? I hope you understand that there being a lot of approved units in the region, and the region still having very restrictive zoning, can be true at the same time. If low interest rates and cheap construction labour from immigration aren't enough to build more housing, I blame housing restrictions as the biggest problem, among others.

[BaddieB]

Originally Posted by whatnext

This Phoenix?

Arizona's housing crisis is only getting worse, experts say
Experts say high prices and high interest rates are making it difficult for many Arizona.ns to buy a home

Why It’s So Expensive to Live in Phoenix
Arizona is a presidential election battleground state, and a dire shortage of affordable housing there is sowing economic anxiety among voters.

Navigating the Arizona Housing Crisis: Millennials struggle to afford the American Dream
Exploring barriers for young buyers amidst soaring prices and dwindling inventory.

First link shows average home prices at $520k, which is about a $700k CAD. Compare that to the average Vancouver price of $2.5M, or median of $2.1M. That's why I said compared to Vancouver.

[chowhou]

Originally Posted by BaddieB

First link shows average home prices at $520k, which is about a $700k CAD. Compare that to the average Vancouver price of $2.5M, or median of $2.1M. That's why I said compared to Vancouver.

Phoenix real estate is barely up, inflation adjusted, since 2006.

https://arizonarealestatenotebook.com/phoenix-real-estate-market-glance-charts/

Meanwhile, real state broadly across Canada has doubled, inflation adjusted, since 2006.

https://www.globalpropertyguide.com/north-america/canada/home-price-trends

[whatnext]

Originally Posted by BaddieB

First link shows average home prices at $520k, which is about a $700k CAD. Compare that to the average Vancouver price of $2.5M, or median of $2.1M. That's why I said compared to Vancouver.

Apparently its enough to freak out Phoenix locals out during an election year. And their median income is $72k USD. makes you wonder how Vancouver's prices got so much further out of whack with reported median incomes...

[Changing City]

Originally Posted by BaddieB

First link shows average home prices at $520k, which is about a $700k CAD. Compare that to the average Vancouver price of $2.5M, or median of $2.1M. That's why I said compared to Vancouver.

It shows the median home price in Phoenix. The average home price would be different - almost certainly higher. The benchmark home price in Vancouver is $1.2m, and in the Fraser Valley (including Surrey) is $1m. (The average price would be slightly higher, and the median price would be a bit lower.)

They're really poor comparisons, as Phoenix sprawls massively in all directions with no limits caused by mountains, an ocean, or an international border. It's a better match to Calgary. Both cities are also running out of water, but Calgary's problem is temporary.

[BaddieB]

While Vancouver is geographically constrained, there is so much room to build up. There is room for lots of new housing units, they're just illegal to build, and where they're not, you have to pay tens, if not hundreds, of thousands of dollars in fees, taxes, and even obligations to provides reduced rents.

[Changing City]

Originally Posted by chowhou

Phoenix real estate is barely up, inflation adjusted, since 2006.

https://arizonarealestatenotebook.com/phoenix-real-estate-market-glance-charts/

Well yes, Phoenix home prices are barely up since 2006, inflation adjusted, because there was something called a 'Housing Crash' in the US which was caused by the global financial crisis, due to predatory lending in the form of subprime mortgages targeting low-income homebuyers (in the US). Our banking system was more heavily regulated, and our banks were more cautious about lending, so the collapse in prices in Canada was less, and prices recovered faster.

If you pick 2011 as your start date, prices in Phoenix have gone up more than three times, (from $81,000 US to $242,260 US in 2000 dollars), while in Vancouver the equvalent change over the same period would be from $505,000 CA to $713,163 CA in 2000 dollars.

Originally Posted by chowhou

Meanwhile, real state broadly across Canada has doubled, inflation adjusted, since 2006.

https://www.globalpropertyguide.com/north-america/canada/home-price-trends

And it has in Vancouver too. In May 2006 the benchmark price for a home in Vancouver was $435,000, which adjusted for inflation would be $640,488 today.

The May 2024 benchmark price is $1,212,000, so that's slightly less than double the 2006 price. So whatever has driven prices up in Vancouver seems to have driven them up in the whole of Canada at a similar rate.

[logicbomb]

Originally Posted by chowhou

It's crazy how the rest of the world seems to have it figured out, but I guess we Canadians are just too weak and dumb.

Nope, knowledgeable Canadians want change. It's just the fact we have boomers and lobbyists running governments that prevent us from progressing forward.

Communities for nearly 80 years have been built around the automobile. You still see newly built areas not even having a walking grid and comprised of cul-de-sacs. Change can start, but we are simply keeping the same built form as we always had an densifying without any rational improvement to the infrastructure.

I'm pro-density but there's a serious lack of amenities in the region right now. Health care is in a scary state and the education system is in a downright depressing state where you may see staggered hours in Surrey. There's a notable lack of parking and rapid transit improvements are lagging.

To better accommodate density in these neighborhoods, we should be building more cores to the surrounding community.

[Changing City]

Originally Posted by logicbomb

Nope, knowledgeable Canadians want change. It's just the fact we have boomers and lobbyists running governments that prevent us from progressing forward.

Out of 40 cabinet members, it looks as if only two are Boomers. The vast majority are Gen-X, with a couple of Millennials for balance.