Photo: Joe Mabel/Flickr
Demand for new-construction homes remains fierce amid supply shortages in Metro Vancouver, a recent report from the Urban Development Institute (UDI) Pacific suggests.
“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 and CEO Anne McMullin.
In fact, the housing shortage is so severe in one segment of the local housing market that UDI Pacific states just eight new townhome residences were available and unsold at December’s end.
Looking at 2016’s fourth quarter, the report outlines developments in Metro Vancouver’s new and resale housing markets, including housing starts and inventory levels.
Metro Vancouver concrete-condo units have hit the lowest standing-inventory level ever recorded over the past five years, with only 26 units completed and unsold in 2016’s fourth quarter.
The standing inventory of wood-frame condominiums also saw a milestone decline. It sunk to a six-year low, as there were only 27 units currently completed and unsold, compared to 340 units recorded during the same period last year.
To address housing affordability and demand in the province, the BC government has taken some recent action in an effort to impact the overall housing market, notes the report.
Significant moves include the BC’s government’s recent announcement of a five-year interest-free loan for first-time homebuyers (up to $37,500) and lifting the 15-per-cent foreign-buyer tax on non-residents who have work permits and pay provincial taxes.
But McMullin says these measures are still not enough to address the housing crisis in Metro Vancouver.
Over the past year, Metro Vancouver’s population has grown by 30,700, with a new population estimated at 2,177,200 residents.
Currently, Metro Vancouver’s ratio of 1.4 new residents per housing start is below the five year average of 2.2 new residents per housing start.
The report suggests if this trend continues, it would be a favourable outcome for buyers and tenants.
Construction on 791 townhomes started in 2016’s fourth quarter, which is up about 11 per cent compared to last quarter. For condo starts, the fourth quarter saw a 9 per cent decline with 2,896 condos being built compared to last quarter.
The fourth quarter demonstrates a tight gap between housing supply and population growth, and rental vacancies are also limited. Most municipalities in Metro Vancouver have a drum-tight vacancy rate of less than 0.6 per cent.
The average benchmark prices for all resale homes, including condos, in Greater Vancouver saw an increase compared to the same quarter in 2015.
Apartments increased 18 per cent to $511,567, townhomes were up 32 per cent to $666,033 and single family homes rose 24 per cent to $1,513,467.
McMullin says there’s plenty of land available to build more homes on, but 85 per cent of the land is reserved for single-family housing, restricting the development of multi-family housing including condos, townhomes and duplexes.
“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,” says McMullin.