METRO VANCOUVER (NEWS 1130) – New figures from the Real Estate Board of Metro Vancouver are showing a mind-boggling increase in home prices when you compare this January to last. Experts say policy makers need to take action now to stop homes from becoming any less affordable.
The average selling price of a single-detached home in Metro Vancouver (excluding Surrey) was $1.83 million in January, according to the Real Estate Board of Greater Vancouver. That’s a year over year increase of 40 per cent. The adjusted industry benchmark price now sits at about $1.3-million.
Even condo values increased 19 per cent in one year. A more normal yearly increase would be between five and 10 per cent.
Real Estate Board President Darcy McLeod says this doesn’t have characteristics of a bubble ready to burst. “Real estate is a supply and demand marketplace and it does ebb and flow. If we look at the long term trend, if it’s a bubble it’s been growing for more than 20 years… Vancouver’s always been out of sync with the rest of Canada. That’s not likely to change anytime soon.”
Thomas Davidoff with UBC’s Sauder School of Business is pointing to foreign investment. “Anecdotally, one hears that foreign investors are turning to condos and townhomes now that single family homes have been bid up as high as they are and the supply is as limited as it is.”
Davidoff is one of many academics who have put forward a taxation plan to address the problem. The group is calling for a surtax on vacant properties with owners who don’t contribute to the tax base.
He says enough research has been done to support some sort of action on the housing affordability problem, which is likely to only get worse. “Twenty or 30 years from now, Vancouver is not going to be an inexpensive place for working families. It would be very hard to make it so. But within the next 20 years, with sensible tax policy and of course, relaxing zoning restrictions, we can add a lot of condo and townhome supply.”
The provincial government says it has been studying things like foreign ownership, but so far has presented no legislation to address the issue.
The Fraser Valley Real Estate Board is also reporting increases for all types of homes, but they’re not even close to what’s being seen in Metro Vancouver. The benchmark price for a single detached home there increased by 20.9 per cent, while the price for townhomes rose 13.8 per cent and the price for the average apartment went up by 7.8 per cent.
McLeod spoke live on NEWS 1130 about these figures: