Multi-Family Housing shortage still a major issue
AFFORDABILITY IS NOT EXPECTED TO IMPROVE
Feb. 20, 2017
VANCOUVER, BC —Only eight new townhome units were completed and available for purchase across the entire lower mainland region at the end of December, according to UDI’s latest fourth quarter State of the Market 2016 Research Report on population growth, new home sales and supply.
“The report confirms that doing nothing, blaming foreign buyers, or introducing new, punitive taxes have not made housing more plentiful or affordable for home-seekers,” says UDI President & CEO Anne McMullin.
“We need more houses for more people, especially along rapid transit corridors,” she added. We have plenty of available land, but 85% of it is locked up as restrictive, single family zoning, meaning no multi-family condos, townhomes, rowhomes, duplexes or even sales of laneway homes are permitted. Coupled with years of delays in multi-family building approvals, rising land costs and lack of available land to build on, aside from industrial, agricultural and park land reserves, home-seekers can count on prices to keep rising,” she added. “We all have to share in the solutions and consider the greater good and community health.”
She cautioned that when interpreting this report, the best measurement is what new housing is currently “available”, not just how many “housing starts” exist; they’re often pre-sold before they’re even built.
Report Highlights:
- Eight townhome units available and unsold across the Metro Vancouver. This is not a typo. See chart 8.4 on page 14.
- Metro Vancouver currently has only 26 concrete condo units completed and unsold. See graph 6.4 on page 12.
- Metro Vancouver population up 30,700 over the past year. Current population is now estimated at 2,177,200 residents See chart 1.1 on page 7.
- Rental vacancies are continuing to be wafer-thin across Metro with most municipalities having a less than .6% vacancy rate. See chart 5.6 on page 11.
- Wood frame condos show a 92% decrease in inventory compared to that same fourth quarter in 2015 and also represents a six-year low. See chart 7.4 on page 13.
I see data and analysis for Metro Vancouver not the Lower Mainland. Could you update your article or show me where it includes the Fraser Valley?
Thank you.
Hello Graeme, The Fraser Valley new home statistics you seek are included in the “outer metro” category through all the charts/graphs. As well, resales for Fraser Valley start on page 17. Hope that helps. Cheryl
By all means keep new supply coming, but…
Off the top of my head, didn’t I hear somewhere that new housing starts significantly exceeded the growth in population in the Lower Mainland over the past year?
That would mean that new places continue to be built for people who don’t live in them. The challenge to providing “housing more plentiful or affordable for home-seekers”, then, is to somehow give residents more priority over investors.
Sorry Anne, I don’t see how this will be solved by building more units that will continue to be bought by investors (local and foreign). Could it be the blaming and punitive taxes haven’t gone far enough?!
Let’s see now, according to Metro Vancouver Regional District stats, between 2001-2011;
Population – net increase of 125,000 households
Dwelling units – net increase of 163,000 units
http://www.metrovancouver.org/services/regional-planning/PlanningPublications/2011_CensusBulletin1-Pop_and_Dwell.pdf
Dwelling unit growth surpassed household growth, yet home prices skyrocketed at an unprecedented 165% during that time.
Metro’s been keeping ahead of the population curve when it comes to supply, and while that’s good, it obviously shows that lack of overall supply is not the issue when it comes to skyrocketing home prices.
Given that most of the concern about prices has occurred in the past five years, shouldn’t we wait until we get all of the stats for 2016 before we make such pronouncements? Do we want to make any statements with the word “obviously” based on data that is now almost 6 years old?
1. The data referenced both price rises and housing supply during a period. When that period happened is irrelevant – the point is that home prices rose even while supply outgrew demand – so no correlation.
2. Prices rose 165% between 2001-2011. Between 2011-2016 the benchmark MLS price has risen 35%. Prices rose faster during the period 2001-2011. Again no correlation with supply.
3. I can’t yet find data for 2011-2016 for supply, but here’s a snapshot of last year; http://vancitycondoguide.com/the-big-boom/
Metro Vancouver saw 27,914 units started in 2016. Metro’s population has grown by an average of 11,500 households per year over the five years. If last year is any indication then we certainly are not lacking in supply.
It would be wonderful if we could just compare numbers and say: “Ta da, problem solved!”. But the housing market is not a single, large homogeneous mass, as I’m sure you realize. It’s made up of sub-markets defined by geography, price, tenure, built form and local amenities (and that’s only on the supply side). Simply adding a bunch of 1BR + den apartments in 35-storey high rises doesn’t really help a young family of 4 looking for a nice ground-oriented 3BR townhouse. Looking at Metro-wide numbers provides a partial picture, at best. Even figures broken down by city/municipality don’t necessarily tell the whole story, because buyers often look at regions (Tri-Cities/ North Shore/ South Surrey/White Rock, to name a few).
Not to mention that buyers have choices between new and existing, and so total number of starts/completions tells only part of the story. How many listings of resale units are out there? What is the sales-listing ratio?
Like it or not, we’ve also got to consider that a certain percentage of housing units are purchased by investors. Some of them rent those units out, some don’t. Some are from Canada, some aren’t. Whether or not new policies will curb the number of investor-units being purchased, or the additional fees/taxes are simply considered “a cost of doing business”, is yet to be seen. Until the powers-that-be feel that it is politically expedient to “build the wall” (so to speak), we are going to have to accept the investor as a significant player in the market. And that means that units will be absorbed by buyers who do not register on the census as “population”.
More malarkey from the real estate shills. As David Eby points out in today’s Globe & Mail, this is a red herring:
“Mr. Eby, whose Vancouver riding houses some of B.C.’s most expensive mansions, said focusing solely on increasing supply to meet demand does not work.
“That belief, unfortunately, was clearly mistaken and resulted in prices that bear no recognition to the amount of money that people can earn locally,” he said. “At first, as prices started to rise people were generally happy about it, but then as the prices continued to go up they realized that they couldn’t actually access the money without selling their home or going into debt on the belief that the market would continue.”
http://www.theglobeandmail.com/news/toronto/ontario-isnt-moving-fast-enough-to-track-foreign-buyers-observers/article34074430/
There is a discrepancy between UDI’s stats (as reported above) and the actual census. The 2016 census tabulated a population of 2,464,431 in Metro Van (23 jurisdictions), a tad more than 150,000 in growth since the 2011 census. That is the population of a medium-sized town added in the last five years.
Moreover, the UDI figure is still 130,000+ short of the 2011 stats. What census year were they using? What is their definition of “Metro Vancouver”?
The 2016 census also records 1,027,613 private dwellings, a bit over 78,000 added since 2011.