Another factor in affordability, from Business in Vancouver:
“Buildable” costs expose disconnect in condo market
Startling multi-family land prices are creating a “disconnect” in a high-rise condominium market
The Vancouver high rise condo market is becoming increasingly disconnected from the local economy and from local buyers,” warns Frank Schliewinsky, principal of Strategics Marketing, which publishes the Vancouver Condo Report. Schliewinsky said “ In the past year, the new high-rise condo market has shifted so much away from its historical basis that it really can’t be considered as a ‘Vancouver’ housing market anymore.”
Over the past 12 months the average asking price for new high-rise condos in Metro Vancouver has increased by 26% and the average price per square foot by 16%, according to Strategics. And, based on what developers are paying for land, future condominium prices appear destined to keep rising.
Yet “[there has been] no big increase in average household income,” Schliewinsky said.
Is this true only of land for highrises, especially since the example quoted in the article was for a site zoned 1.75 FSR – typically more a mid-rise density?
Vancouver real estate values have been driven by immigrants and speculators since the 19th century. If there was any connection to income we’d all be making 60% more than our counterparts in Calgary instead of 20% less.
The difference is that in the past those who immigrated were largely earning their wages here as well. Now local wage earners are having to compete for housing with those deriving their income from jurisdictions with little environmental or labour protection.