It’s housing, says Business In Vancouver (worth more than GDP of resource industries combined).
Projected dollar volume of residential resales in 2015 through the Real Estate Board of Greater Vancouver is pegged at $38.6 billion, up 41% from a year ago, according to the BC Real Estate Association. Sales of detached houses alone in the region are worth $24.9 billion. In the Fraser Valley, total residential sales will tally $11.4 billion in 2015, 11.4% higher than in 2014.
In comparison, the total GDP of the B.C. forestry industry this year will be $1.8 billion, the oil and gas industry will be worth $6.9 billion and the mining industry will ring at $4 billion, according to forecasts from Central 1 Credit Union. Together these traditional B.C. industries will generate a GDP of $12.7 billion in 2015, or about three months worth of housing resales in the Vancouver region.
And, therefore the govt will do everything possible to protect its largest industry and lobbyists.
The key quote from the article:
“resale housing sales “doesn’t really add any value.””
Exactly.
A little perspective is needed.
Yes, there is a steep housing affordabiity challenge here, and yes there is real estate speculation. Neither of these are new, even with the above figures bandied about without context.
In a 2014 report by the Greater Vancouver Gateway Council, the GDP of the port, YVR and rail / truck infrastructure rings in at $7.2 billion and 82,000 jobs. The induced and indirect impacts of this core economic activity (e.g. employee home purchases, purchasing commericial supplies, etc.) pushes the GDP to $15.8B and 182,000 jobs. This is a stable and reliable economy not as susceptible to wild boom and bust cycles.
The annual GDP of Metro Vancouver exceeds $100B. It grew by 3.2% and 30,000 jobs in 2014 and is expected to top out at yet another 3% growth this year, undoubetedly helped along by real estate sales, but also by significant growth in the tech, retail and other sectors.
The GDP of the province rang in at $237B in 2014, but half of that is owned by the Metro. The calculus of the province does not acknowledge the fact that the Big Smoke is it’s primary economic engine, and that makes many of us cynical.
Though the Metro real estate sales comprise about 34% of the local and 16% of the provincial GDP, it’s not a complete story. There is much talk about a housing bubble and wealthy foreign buyers. Perhaps the discussion should widen to try to actually define an affordability ceiling where sales will cease to grow. That ceiling will no doubt be influenced by interest rates.
It could be worse. Calgary, which has a far less diversified economy (in fact, it’s a one-piston engine that’s barely sputtering today after roaring out of control for years), housing sales have dropped over the past year by almost 30% with a corresponding decrease in average value of over 5%. One could move to Calgary and buy a cheaper home, but then one must find a non-existant job too.