BC Place Vancouver by Chris Coleman
As the price line continues to rise in Metro Vancouver real estate prices affordability has become the big catchword in the current municipal election campaigns. Everyone running for office decries the high prices and blames it on foreign ownership. The problem with that thesis is there is no proof.
The Canadian government does not track stats of people coming and going and buying properties. CMHC in doing a survey of condo investment did not include foreign ownership as it is too difficult to get accurate data. They are now approaching the banks for information on who they are financing to buy properties.
In the Westside of Vancouver in particular detached homes are being left empty. They are places to park funds for many off-shore investors who will just wait to resell them or demolish them and rebuild to sell. Most information is anecdotal. It has created an urban myth around who is buying and driving up prices.
Heritage Homes Owners Losing the Game
As it is election time the Vancouver City Council has decided to shore up some of its base and look very Green as per its platform. Their usual focus is on providing social housing rental stock and wiping out homelessness but there has been such an outcry about rising house prices and destruction of Vancouver's housing heritage they had to respond.
They ordered the city planner to look at the established areas where solid older homes with worthy architectural detail exist and recommend changes to the building permit process so they can't be razed and replaced. They have to be renovated and enlarged to include the prized architectural features. Predictably, they have run smack into the Law of Unintended Consequences.
There was a a big spread on the front of the Business section of the October 30 Vancouver Sun about an older couple who were looking to downsize from their Second Shaughnessy residence to one that would accommodate their health challenges. Imagine their surprise and that of other property owners in these desirable areas who had maintained and improved their existing homes over the years only to find when they consulted their realtor, architect and builder that their property had lost $500k in value compared to their neighbours.
Under the new rules older homes with architectural merit have to be renovated not torn down with the outcome of more cost to build less space. Plus the renovated home is still 80+ years old. This has immediately impacted the prices of those homes. In the case in the newspaper the next door neighbour neglected their unexceptional home on the same size lot and received $500,000 more for it than their neighbours with the well-maintained home of architectural merit. It may be a wake up call to all the voters who said they didn't want homes destroyed and now may lose $$$ when their property goes on the market.
The big rise in sale prices has been for detached homes. Condos have risen too but not as much. There has been pushback on the issue of expectations. There have always been levels of home ownership relative to the prices of the time long before foreign ownership became a market force.
Affordability Lies in Suburban Neighbourhoods
Shelley Fralic a popular Vancouver Sun columnist told everyone she was born in Vancouver 62 years ago and has never been able to afford a detached house there. She outlined the odyssey of home ownership that occurred when she and her former husband were establishing their family. It was the typical story of the times---first condos then a tiny run-down detached home, then a slightly larger older detached home needing work---all in the outlying city of New Westminster.
Location, location, location. For some lucky children and grandchildren their parents or grandparents bought homes in the Westside of Vancouver many years ago and have won the lottery of rising prices. Young people buying in the cities close to Vancouver need help with downpayments and if their family home is in the hinterland the chances are that theirs will be too.
There are attractive suburban neighbourhoods and outlying cities that are growing exponentially with younger or retiring families who want lower cost housing and good schools. The downside to living in these places is the commute to work. For many younger families the trade off is a condo downtown or on the Eastside where children are raised with all the city amenities at their doorstep. This is a strange concept to those raised in Vancouver with its low density compared to other cities but is a fact of life today in Vancouver.