Despite the media trumpeting stats that the real estate market is down the reports are referring to the numbers of sales, not prices. April sales were 4.8% above the 10 year average for the month but much below the megasales numbers of 2016. There has been little inventory coming on the market due to seller uncertainty about what would be available to purchase if they did decide to downsize in this market.
Vancouver by Kyle Pearce
The stratospheric detached home prices have resulted in a huge surge in the numbers of condos and townhomes sold. The benchmark price for an older ordinary detached home, considered mainly as a building lot, on the Westside of Vancouver is $3,500,000. In North Vancouver and Richmond the benchmark price is $1,600,000. Lack of affordable inventory has created a multiple offer scenario on almost every sale. For the first 4 months of 2017 condominium and townhouse sales have comprised 68.5% of the residential sales market on average. For 2016 in the comparable sales period condominium and townhouse sales were at 58.2% market share. A 10% increase in one year.
After the May 9th Provincial Election the real estate market has leveled off while everyone waits to see which party forms the government and which wild real estate scheme will come to the fore. There was a split in the province as the resource based north looked for development projects and jobs, the Lower Mainland population worried about Affordability. A huge portion of the population feels uncertain of their future in the Greater Vancouver region. There is little affordable housing to rent or buy, the cost of living is high, transit projects are not being funded, infrastructure is being neglected and people who grew up here, who moved here no longer feel like they have a safe future. Vancouver is hurtling down the road of becoming a world wealth resort city.
There is resentment in the population over the perception that outside money is distorting the real estate market due to the negligence and greed of the Federal and Provincial governments who look away from dirty money pouring into Canadian real estate and being laundered clean when the properties are sold. Canadian banks are complicit too. There is a short term focus on share holder value and none on the longer term effects of no families,no young people, no life in the heart of our cities. This fear is endemic in London, in Sydney, in New York, in San Francisco, in Toronto and elsewhere. Canada has the Immigrant Investor Program operated by Quebec, the US sells Green Cards to foreign investors who invest in mega real estate projects through the EB-5 Visa program.
In the election the Liberal party opted for tweaks to the status quo, not wanting to diminish residents equity in their homes. The idea being to keep home owning voters onside and hoping that more people can afford to fund their retirement from their home sale. They also focused on their economic record and balanced budget. They were successful outside the Lower Mainland.
The NDP offered to raise taxes on corporations and high earners and remove user fees from almost everything. No bridge tolls, no healthcare costs, subsidized daycare, renters subsidy, to build 114,000 units of affordable housing etc. Higher Foreign Buyer Taxes, forced rentals of empty homes were also part of the program. Local voters who closed their eyes to the costs of the platform just wanted it all to happen for them. These promises swept many seats in the Greater Vancouver area. If the recounts give more seats to the NDP we may see how they implement these pipe dreams.
The Green Party is holding the balance of power and their main goal is to change the way the voting process occurs so they can get more seats in the future. No First Past the Post even though that current system has been reaffirmed by referendum in BC in the recent past. The Greens plan to force whatever party they support to implement Proportional Voting without a referendum. They have also got a pie in the sky housing platform but it seems to have slipped down the To-Do list along with their environmental concerns. A recent post-election survey showed that many people have voters remorse already. What they thought was a protest vote has upended the system and tied the Legislature’s hands.
The real estate market is still busy but it’s waiting for the other shoe to drop. The final vote count and appointment of a government will occur before the end of May. May the Games Begin!