August 2007 Greater Vancouver Housing Report
By ebizniz on October 14, 2007 - 11:12am
A posting by James Wong at RE/MAX Westcoast.
According to the Greater Vancouver Real Estate Board's August 2007 report on house prices and sale activities, the demand for housing continue to be positive. The average sale prices for apartments, townhouses and detached homes are:
Apartments: $367,944
Townhouses: $446,577
Detach homes: $726,067
With the average Greater Vancouver household income at $63,300, home buyers are squeezed out of the home ownership market. Or, they are forced to buy the most affordable apartments as shelters for their families.
While Vancouver house prices are consistent with pricing trends for the above types of dwelling, there is a market disconnect with "affordability" and "average prices" in other major Canadian Cities. If you take a look at the various charts as presented by Brian Ripley here, you'll find that Vancouver home owners are bearing a much heavier cost in home ownership.
Our average detached home prices are twice as much as that in Calgary and Edmonton and Toronto detached home prices are only around 40% of that in Vancouver. Ottawa and Montreal prices are at about one-third the price in Vancouver, have the most affordable detached homes in the country.
House prices are subjected to the economic law of supply and demand. We have a high housing prices situation in Vancouver for a long time.
We must find out why there are such disparity in home prices, and what can be done about it. The provincial Government in BC should be the first to be questioned on their housing policy for limiting the supply of "land" for housing.
Is the Agriculture Land Reserve that control vast urban land parcels still relevant in serving the well being of British Colombians? Urban town planners are urging for better utilization of land resources. Farming for agriculture lands bordering the city centers is not the best and highest use of these land parcels.
Until there are urgency and agreement by the Governments taking action to ease the land supply problem, the critical housing affordability problem in Vancouver will not be solved.
House prices are subjected to the economic law of supply and demand - this idea is the most fundamental in your post. Yes, this is a rule. And our Vancouver is no exception. Rising home prices is a natural phenomenon in cities that are expanding, improving, and becoming more and more livable. Seemingly it is a contradiction, because the higher the prices are the more difficult it is to buy a decent property in the given city. So you may argue that thus the city is becoming less and less livable. Well, there really is a price you have to pay to move to, or continue living in, the city.
Can someone comment on why Toronto's house prices are lower than Vancouver? It's difficult to explain the high Vancouver house prices other than the problem being due to limited land for housing being made available. Lack of cheap land supply will naturally force land prices to go up thereby affecting the selling prices of the homes being built.
House prices are subjected to the economic law of supply and demand - this idea is the most fundamental in your post. Yes, this is a rule. And our Vancouver is no exception. Rising home prices is a natural phenomenon in cities that are expanding, improving, and becoming more and more livable. Seemingly it is a contradiction, because the higher the prices are the more difficult it is to buy a decent property in the given city. So you may argue that thus the city is becoming less and less livable. Well, there really is a price you have to pay to move to, or continue living in, the city.
Most of my realtor friends in B.C. and Ontario, scoff at my idea that we, in Canada, are about to see the worst housing crash in history, and it will be the worst in The Lower Mainland of British Columbia, where Canadian House Prices are a way out of control. Suffice it to say, "when America catches a cold, Canada will catch pneumonia". For two years, California, Florida, Texas and moving northward to New York and Chicago, the worst forclosure rate in history started with the crash of the subprime mortgage market in 2006-7. The whole world is feeling the effects. AND it has only just begun.
Visit www.mrbc.ca and, on the HOME page, click on ECONOMIC DEPRESSION (near the Bottom of the page) to learn what is really going down.
John
This is the Greater Vancouver Housing report, it seems very interesting.