Canada's 'housing bubble' deemed close to bursting

[casper]

Originally Posted by geotag277

Lane way housing are like basement suites. It's a band aid to housing demand, and has more to do with low vacancy rates in general than affordability. Both of these options don't really give non-wealthy individuals a path to home ownership and just exacerbate the housing supply issues, while in turn making existing housing even more desirable, valuable, and expensive.

The role of laneway houses is to provide more rental stock and to deal with the weird dynamics of extended families.

[urbandreamer]

The stock market has recovered nicely so it's possible we won't see a crash this year.

It's also year of the monkey which means the Chinese investors will be feeling lucky.

[someone123]

Originally Posted by casper

The role of laneway houses is to provide more rental stock and to deal with the weird dynamics of extended families.

The economics of the laneway houses don't seem favourable though. They cost much more to build per unit ($200,000-300,000) than medium or high density multi-unit buildings, they tend to be really small, and they are usually owned by the owner of the main house. Only about 1,000 permits have been issued for laneway houses in Vancouver.

It might make perfect sense to permit them as an option for property owners but they're not a significant factor for improving housing affordability or home ownership rates, even though they're sometimes sold that way (and even this tiny non-solution gets the NIMBYs up in arms).

[BIMBAM]

Serious question here. We all know that the affordability crisis in Vancouver is the city's biggest problem, greatly effecting the lives of residents, especially the younger generation by keeping us off the property ladder, and stifling the city's potential economic growth. People here are very concerned about it, but most don't understand that restrictive zoning is the root cause as some talk about here. Are there any local organizations or advocacy groups I can join or get involved with to advocate for rezoning SFH neighbourhoods in this city so we can bring back affordability and livability to the region? I want to do my part and it'll only happen if we can raise awareness, change minds, and exert political pressure on the city government.

[whatnext]

Originally Posted by BIMBAM

Serious question here. We all know that the affordability crisis in Vancouver is the city's biggest problem, greatly effecting the lives of residents, especially the younger generation by keeping us off the property ladder, and stifling the city's potential economic growth. People here are very concerned about it, but most don't understand that restrictive zoning is the root cause as some talk about here. Are there any local organizations or advocacy groups I can join or get involved with to advocate for rezoning SFH neighbourhoods in this city so we can bring back affordability and livability to the region? I want to do my part and it'll only happen if we can raise awareness, change minds, and exert political pressure on the city government.

Restrictive zoning is not the cause.

There are a huge amount of units being built, more than local market absorption requires. However when you take a huge amount of SFH stock and essentially restrict it to those deriving their income from foreign sources, the action ripples along the whole supply chain. The old "we can build our way out of this" lie is perpetuated by developers, who use pressure from well-meaning people like you to get units built to sell off overseas. Studies have shown time and time again is that a SFH is most Canadians desired goal. Building more units that people don't really want is not the answer. Getting foreign money out of the market is.

[urbandreamer]

Yeah look at Guelph for example: very few condo towers under construction yet the SFH remains affordable to most middle class families.

The only markets that are unaffordable are those that have heavy investment activity: Vancouver, Toronto, perhaps Calgary and Victoria.

What Vancouver really needs is a huge housing crash--probably only an earthquake would cause that.

[geotag277]

Originally Posted by whatnext

Studies have shown time and time again is that a SFH is most Canadians desired goal.

It doesn't matter if studies show that people's goals are to own a single family detached home in Vancouver or to own a Lamborghini. The fact is it is an unrealistic goal to have every one working in Vancouver to be able to afford their own individual plot of land. It wasn't realistic in 1990 when Vancouver was smaller than Ottawa is now, and it isn't realistic today in 2016 where Vancouver has greater than 2.5 million residents and people like you are actively campaigning against re-zoning to bring affordability down.

The proof is in the pudding. Both condos and townhomes have nowhere near the value appreciation in Vancouver compared to single family detached homes. These options remain, and will continue to be, the best option to improve affordability for non-wealthy people, and the best option going forward is to run these single family detached houses out of the city through aggressive re-zoning.

The only markets that are unaffordable are those that have heavy investment activity

Did you really compare Guelph to Vancouver?

The difference between Vancouver and Toronto and the rest of the cities in Canada, is that both these cities no longer have land to develop into single family housing stock to meet market demand. The taps have been turned off.

Historically, every time that happens, there is a huge value appreciation in single family detached homes because, surprise surprise, land is increasingly valued at a premium. (See: San Fran)

Yes, you can build your way out of it, but it requires the city actively working with developers to ensure sustainable development. See: Burnaby forcing three bedroom suites.

Again, the proof is in the numbers. Condos and townhomes, especially outside of Vancouver city proper, have no where near the value appreciation of single family homes.

Single family homes have been an unsustainable part of Vancouver's housing since 1990, twenty six years ago. It is only a recent development in Toronto.

Those chomping at the bit to return to a real estate market that looks like the 1980s in Vancouver and Toronto where every working professional was able to own their own land are in for severe disappointments.

[Procrastinational]

Originally Posted by whatnext

Studies have shown time and time again is that a SFH is most Canadians desired goal. Building more units that people don't really want is not the answer. Getting foreign money out of the market is.

Even if the supply of foreign money was completely shut down, Vancouver would be less affordable than the national average. The only way to make SFH affordable in a large metro area is to allow sprawl. The moment you constrain development geographically, the price of SFH will rise.

I can't think of a single city that has all of the following:
1. Affordable single family housing
2. Geographical (or zoning) constraints to growth
3. A strong economy

You can pick two. You can't have all three.

Truly the only way to make SFH affordable in the Lower Mainland would be to eliminate ALR restrictions and cover the entire valley with tract housing. I don't think anyone wants that.

[1overcosc]

Originally Posted by Procrastinational

I can't think of a single city that has all of the following:
1. Affordable single family housing
2. Geographical (or zoning) constraints to growth
3. A strong economy

You can pick two. You can't have all three.

In Toronto, 2) is brought about by a combination of provincial laws limiting urban sprawl and a poor transportation system that strongly encourages people to live close to where they work.

If, in the future, with the large wave of transit improvements coming (especially GO RER which targets long distance travellers) and/or the province decides to ease up on the Greenbelt and the Places to Grow laws, I wonder if 2) could come crashing down and the city subsequently sees a rebirth of urban sprawl.

[TorontoDrew]

Originally Posted by Procrastinational

Even if the supply of foreign money was completely shut down, Vancouver would be less affordable than the national average. The only way to make SFH affordable in a large metro area is to allow sprawl. The moment you constrain development geographically, the price of SFH will rise.

I can't think of a single city that has all of the following:
1. Affordable single family housing
2. Geographical (or zoning) constraints to growth
3. A strong economy

You can pick two. You can't have all three.

Truly the only way to make SFH affordable in the Lower Mainland would be to eliminate ALR restrictions and cover the entire valley with tract housing. I don't think anyone wants that.

This is the case with Toronto. It has much more room to sprawl compared to Vancouver but land (mostly rural) protection laws have forced concentrated developments and have helped to push up prices. There are pros and cons depending which side of the fence you sit on. In the long run its a good thing for sure. Toronto and Vancouver would benefit though by curbing some of the foreign investments. Developers would still have a market but less gouging would happen.

[geotag277]

Having access to foreign investors also tends to speed up multi family development as things get sold quicker. Plenty of those units are rented out as well which adds to housing supply.

[ssiguy]

Originally Posted by BIMBAM

Serious question here. We all know that the affordability crisis in Vancouver is the city's biggest problem, greatly effecting the lives of residents, especially the younger generation by keeping us off the property ladder, and stifling the city's potential economic growth. People here are very concerned about it, but most don't understand that restrictive zoning is the root cause as some talk about here. Are there any local organizations or advocacy groups I can join or get involved with to advocate for rezoning SFH neighbourhoods in this city so we can bring back affordability and livability to the region? I want to do my part and it'll only happen if we can raise awareness, change minds, and exert political pressure on the city government.

I REALLY appreciate your wanting to make positive change in the city. I admire your will of wanting to make our city welcoming to everyone regardless of socio-economic class and make the city the truly liveable one it use to be.

The sad truth however is that you are proceeding from a false assumption..........that they care whether you stay or go. All the civic and provincial parties are completely funded by real estate developers and backed up by the local media that gets huge advertising revenue from real estate companies.

All the political parties and businesses {even if they are not benefitting from the cost of living due to the inability to get skilled workers} know that there is no stopping it without a truly cataclysmic economic consequence. Calgary has oil, Toronto has finance, and Vancouver has real estate.

In Vancouver strong real estate has gone from being a reflection of a strong economy to the cause of it. The City has become so dependent upon it that doing anything to slow down the frenzy and make the city affordable again is like asking Ottawa to close down all the civil service offices or asking Windsor to stop making cars.

If this means that you {or your entire generation} are to be considered nothing more than "collateral damage" then so be it. Just as Ottawa will do anything to stop civil service layoffs, and Windsor will do anything to keep the automaker in town, Vancouver will do anything to keep the real estate game going.

Even if City Hall decided they cared about soaring real estate values and the effect it is having on the average Vancouverite {which they most certainly don't}, they would still have to do everything in their power to keep the Ponzi scheme going because the city has become completely dependent upon it.

[whatnext]

Originally Posted by geotag277

Having access to foreign investors also tends to speed up multi family development as things get sold quicker. Plenty of those units are rented out as well which adds to housing supply.

LOL, spoken like a true real estate shill. Shouldn't you being trying to offload your property in AB now?

[geotag277]

Originally Posted by whatnext

LOL, spoken like a true real estate shill. Shouldn't you being trying to offload your property in AB now?

Spoken like a true paranoid. Shouldn't you be pointing fingers at "Asian sounding family names" and questioning the motives of forumers who just happen to live in big bad China?

[whatnext]

Dozens of Vancouver-area real estate firms are failing to comply with federal anti-money-laundering laws that require them to identify who their clients are and where their money comes from, The Globe and Mail has learned.

The Financial Transactions and Reports Analysis Centre (FinTRAC), which enforces the legislation, says it found “significant” or “very significant” deficiencies within some five dozen B.C. brokerages in the past year. It decided to step up scrutiny over worries that money primarily from China is being laundered through Vancouver real estate...

http://www.theglobeandmail.com/news/nati...ble-to-money-laundering/article29285770/

[miketoronto]

Sprawl has been curbed in Vancouver of Toronto. Just go to the outskirts of these regions to see that.

Further more, there is a ton of land. If one looks at the old Metro Toronto (which is now the city of Toronto), there are about 2.6 million people in about 245 sq miles. That includes some substantial natural areas. This area includes large swaths of single family housing on suburban lots much larger than you see today.

We do not have a land crisis. If we were able to fit that many people in a relatively small land area, then it should not be that hard to do it today, especially with our smaller lots.

So when looking at Vancouver, if it was developed properly, you guys should maybe have 300 sq miles developed. Not the much larger area you do already, because of poor planning.

This idea that there is not enough land is just untrue.

[CanSpice]

Originally Posted by miketoronto

Sprawl has been curbed in Vancouver of Toronto. Just go to the outskirts of these regions to see that.

Further more, there is a ton of land. If one looks at the old Metro Toronto (which is now the city of Toronto), there are about 2.6 million people in about 245 sq miles. That includes some substantial natural areas. This area includes large swaths of single family housing on suburban lots much larger than you see today.

We do not have a land crisis. If we were able to fit that many people in a relatively small land area, then it should not be that hard to do it today, especially with our smaller lots.

So when looking at Vancouver, if it was developed properly, you guys should maybe have 300 sq miles developed. Not the much larger area you do already, because of poor planning.

This idea that there is not enough land is just untrue.

Not really sure what you're getting at. Vancouver proper has a density of 5249 people / square km, which is higher than Toronto's density of 4149 people / square km. Metro Vancouver's density is 802.5/km^2, whereas GTA's is 849/km^2, but if you look at what Metro Vancouver actually encompasses, there are huge swaths of land that are uninhabitable (primarily Electoral Area A, which is 818 km^2). If you take Electoral Area A out of the calculation, the rest of Metro Vancouver is 1882 km^2 and has a population density of 1309 people / square km, over 50% higher than GTA's.

So if you're saying that Metro Vancouver should somehow be denser and smarter about land use than GTA, it already is.

Vancouver has higher population density than Toronto, and Metro Vancouver (taking out Electoral District A) has higher population density than the Greater Toronto Area.

[BIMBAM]

Originally Posted by ssiguy

I REALLY appreciate your wanting to make positive change in the city. I admire your will of wanting to make our city welcoming to everyone regardless of socio-economic class and make the city the truly liveable one it use to be.

The sad truth however is that you are proceeding from a false assumption..........that they care whether you stay or go. All the civic and provincial parties are completely funded by real estate developers and backed up by the local media that gets huge advertising revenue from real estate companies.

All the political parties and businesses {even if they are not benefitting from the cost of living due to the inability to get skilled workers} know that there is no stopping it without a truly cataclysmic economic consequence. Calgary has oil, Toronto has finance, and Vancouver has real estate.

In Vancouver strong real estate has gone from being a reflection of a strong economy to the cause of it. The City has become so dependent upon it that doing anything to slow down the frenzy and make the city affordable again is like asking Ottawa to close down all the civil service offices or asking Windsor to stop making cars.

If this means that you {or your entire generation} are to be considered nothing more than "collateral damage" then so be it. Just as Ottawa will do anything to stop civil service layoffs, and Windsor will do anything to keep the automaker in town, Vancouver will do anything to keep the real estate game going.

Even if City Hall decided they cared about soaring real estate values and the effect it is having on the average Vancouverite {which they most certainly don't}, they would still have to do everything in their power to keep the Ponzi scheme going because the city has become completely dependent upon it.

I mean, I get that, I really do. There's alot of money to be made and development companies need to develop. When I look at the solutions people throw around though, it always seems to be some variant of restricting supply by forbidding building in their are, or restricting the money coming in so supply can be constricted without the prices going up as much. If we open up the zoning floodgates, how would any of the entrenched interests really be poorer for it? The developers would make lots of money because they'd be developing and selling lots of properties. Selling serious volume of affordable units is more profitable then fewer expensive homes where you spend a premium for one of the few available appropriately zoned lots. I don't think we should curtail their business, I think we should expand it, and make it viable for them to market to new customers who'd otherwise not be able to buy, which would make them more money. The home owners win because their land would be even more valuable if you could assemble it and put up an apartment building, just look at what happened to values on the Cambie corridor. The governments would win because the province and city would be able to grow faster and more residents would mean smaller debts compared to the tax base, not to mention even more revenue from more buildings being built. The only people I see who'd lose would be the single family home owners who don't want to live near the noise of construction sites, want their neighbourhoods to have the same character for the next 4000 years of human history, and don't care about how this would boost their home prices even further. It's these voters the city seems terrified of for electoral reasons, and that is math we can effect through ideas. I'm not dreaming about cheap single family homes here, I just want the city to have affordable, family sized condos, and maybe some townhomes.

[giallo]

In British Columbia, a real-estate rage gets real

Starting next month, if you want to do business with Belcarra, B.C., you'll be able to do it in one language only, if a proposed bylaw goes ahead. A third and final reading of the law, which will require "Canadian English" in all written and verbal dealings with staff in the Metro Vancouver village of 700, north of Port Moody, is slated for March 29. But it seems that one language, in particular, is being singled out:

"A person will come in, they can speak no English, [they're speaking] Mandarin or whatever, and expect the municipality to provide translation," Mayor Ralph Drew told the Vancouver Province on Wednesday. "Or they want to sign a document and they give contact information and it's all written in Mandarin," the mayor added.

Larger Lower Mainland communities, like Richmond, have staff on hand to field questions in Cantonese and Mandarin. But Drew says Belcarra, with its six municipal employees, simply doesn't have the resources.

...

On Wednesday night, in tony Kerrisdale, a crowd of 800 packed the Hellenic Community Hall—intense public interest forced a move to the larger venue—for an emergency town hall meeting to address the "out-of-control real estate market." It was chaired by rookie MLA David Eby, a former Downtown Eastside poverty lawyer with a knack for publicity.

In the last six months, Eby, who unseated Premier Christy Clark in the last election—the kind of brass-knuckled political play rarely seen outside B.C.—has become B.C.'s most-watched opposition figure by skilfully assuming control of the housing debate.

Last November, the 38-year-old Vancouver–Point Grey MLA and former head of the B.C. Civil Liberties Association helped a city researcher undertake a study showing that more than 70 per cent of homes sold in Vancouver's West Side went to Mainland China buyers over a six-month period; remarkably, this was some of the first hard data illustrating the extent of foreign ownership in the local market.

For years, the debate relied mostly on anecdotal evidence. And anyone who dared suggest Chinese buyers were flooding the market was branded a racist—primarily by those with skin in the game, the city's leading developers and condo marketers whose earnings soared as the market has climbed and climbed and climbed, unchecked. Screaming racism was an effective means to shutter the debate. Until now.

...

It's still far from clear that this surging anger risks unseating Clark, in an election slated for next spring. But right now, few are talking about the premier. And no one can seem to get enough of David Eby. One year before an expected election, that's a dangerous place for the premier to be.


Macleans



A CBC news story on the subject yesterday.

• Video Link

[geotag277]

Originally Posted by giallo

Last November, the 38-year-old Vancouver–Point Grey MLA and former head of the B.C. Civil Liberties Association helped a city researcher undertake a study showing that more than 70 per cent of homes sold in Vancouver's West Side went to Mainland China buyers over a six-month period; remarkably, this was some of the first hard data illustrating the extent of foreign ownership in the local market.

Just want to make a quick clarification regarding the results of this study, which I believe are being overstated here.

They obviously couldn't identify the owners as being non-Canadian citizens/permanent residents (partially because that data probably doesn't even exist, which is arguably itself an issue).

The study simply identified last names which have an ancestral link to mainland China. They could have been first, second, third generation immigrants, or even flagging false positives across the country.



I think we should be cognizant of the limitations of these types of studies and aware of what they are truly saying. That is, in this case, that people with Chinese heritage (or even people born of Chinese father/Canadian mother with a Chinese last name, or even if they decided to use a Chinese surname from one of their parents) bought these houses - not that they were purchased from buyers directly in the Chinese mainland who are disconnected from Canadian society. This "study" potentially includes vast and large swaths of Canadian citizens and second/third generation immigrants who may even have a minority Chinese heritage, but are considered "guilty" simply because of their last name.

I think it's important to be careful with what we are saying and the manner in which we say it, because there seems to be a large anti-Chinese sentiment bubbling under in Vancouver (and let's be real, it's been there since the days of the head tax of 1885, and the anti Asian riots of 1907, the Chinese exclusion act of 1923, etc.)

The problem in Vancouver is at it's root affordability. Houses haven't been affordable in Vancouver since 1990 (when they passed Toronto). The problem is not successful domestic Canadians buying houses with their own money (whose last name might be foreign sounding).