The number of homes under construction in the region hit an all-time high of 43,684 in August.
Eric Bond, CMHC economist and principal, market analysis:
“We have been building homes [in Metro Vancouver] at a pace that exceeds the rate of household formation for a number of years, but demand has been such that we haven’t seen inventories of unsold homes rise over that period,” he said.
“We are expecting those inventories to rise over the next two years. That has started in the last few months.
“We expect the average MLS [Multiple Listing Service] price to decline 7% in 2019, and then a further 4% in 2020,” he said.
Another indication that the ‘Housing Crisis as we have known it’ is changing.
All we need is more supply to bring houses down! LOL, how’s that working out?
Hard to say until it actually happens and the standard economic rules are given a chance to kick in . Exclusionary zoning in this town is still on the books. Of course, you have to distinguish between ground-oriented homes and condos. The latter are always cheaper.
It is already happening Alex. As you read, the CMHC notes supply is easily outstripping household formation. What kind of evidence do you need – 50 million empty apartments as in China?
I’ll settle for 50,000 occupied non-profit public rental apartments built in the Metro over the next few years.
Bob, Throttling housing supply when vacancy rates are near zero – and everyone is screaming for more housing – makes no sense whatsoever.
Bob, did you not read the linked report? August is old news, numbers are now falling: There were 40,911 under construction in October. If you think more units coming on stream isn’t helping with affordability, wait until you see what happens to affordability when numbers under construction fall below historical levels.
Numbers are falling? Why is that, could it be builders realize there is nobody to buy? Sounds like classic supply and demand to me.
If you insist on beating the tired drum that we can build our way to affordability I suggest you form a band with Hector Bremner, I heard he is looking for a gig (though I would not be at all surprised to see him resurface as a BC Liberal candidate, maybe for Vancouver-Point Grey?).
Bob, you start off with the statement’sounds like classic supply and demand’ then suggest building your way to affordability does not work. You do understand ‘building you way to affordability’ IS classic supply and demand right?
Personally I think it is important to work both supply (additional units) and demand (empty homes/speculation tax). That said the key is in balance, if the price drops 50% in a month there will be a lot of screaming people. I do expect the demand side to ease up so be interesting to see what the numbers show in 2 or 3 years.
You do realize that house prices are falling, right?
That builders are starting to offer big incentives to fill buildings?
https://www.cbc.ca/news/canada/british-columbia/metro-vancouver-housing-prices-drop-2nd-straight-month-1.4811135
Seems to be working quite well.