As we all know, Greater Vancouver’s housing market isn’t an easy thing to pin down — and you’re not alone if you’re feeling like you’re getting mixed messages on the subject. Driving around the Lower Mainland, it is hard not to notice all of the construction going on, and yet industry experts speak about an inventory shortage.
Couple that with historically-low mortgage rates and houses selling within hours of being listed, often for well over the asking price, you are right to ask “What’s going on?”
January 27th, The Urban Development Institute (UDI) hosted a Virtual UDI luncheon, offering a glimpse into British Columbia’s Real Estate Market: Prices, trends, forecasts 2022. The opinion, wisdom and predictions of industry leaders into issues affecting the industry, including housing starts, residential trends both in the rental and sales pool, and our booming immigration were discussed.
During the sold-out webinar, a panel of real estate leaders – Avtar Bains, president, Premise Properties, Ryan Beedie, president, Beedie Group, Colin Bosa, CEO, Bosa Properties, Rick Illich, president, Townline Group of Companies, and moderators Ward McAllister, president and CEO, Ledingham McAllister and Anne McMullin, president and CEO, UDI – gave much-needed perspective to the picture.
First off, during the first six months of 2021, 50,000 people moved to the province, with the same number called for in the second half; while migration from other provinces exceeded 10,000.
Unfortunately, the province did not come close to building enough homes for people migrating to our shores. BC’s Expert Panel on the Future of Housing Supply and Affordability concluded the province needs to build an additional 10,000 homes per year just to address the growing population.
“Our province is experiencing the biggest population boom in decades,” says McMullin. “And, what we need for all of these people is a place to live, work and play.”
For an hour and a half, the panel discussed all sorts of issues. Here are just some of the highlights:
- Buyers can expect elevated prices, low inventory and fast turnaround to continue.
- With construction costs going up 10 percent per year, and interest rates expected to rise in March, short-term housing sales will keep rising
- A workforce shortage is being experienced throughout the industry. One of the big issues is the Government’s infrastructure projects, like SkyTrain extensions, which are paying “dramatically more for skilled carpenters” than developers are, says Rick Illich.
- On the upside, the immigration policy is committed to allowing more skilled tradespeople into the province
- According to Bosa, we are seeing much more owner-occupied buyers in residential projects than in prior years, and that trend will last. The number of foreign buyers, however, continues to decrease.
- Owner-occupied buyers want bigger units and a better mix of products available. Developers need to adjust to these changing trends.
- As far as affordable projects, investors are buying in.
- Downtown only saw three launches last year. This is clearly an underserved market. Downtown is attracting more discerning buyers, who want luxury and where the brand is very important.
- Squamish is the new Fraser Valley, not just because it offers typically larger homes but because of the lifestyle
- BC Housing completed 4,000 affordable units last year, but a crisis in both the rental and affordable housing will continue.