This article by Bloomberg News via Frances Bula says it all.While housing price increases went up by 40 per cent in the last year in Vancouver, there is a dearth of houses listed for sale. “What you see instead is the shortest list of homes for sale in almost a decade, even as the price of a typical single-family home surged to C$1.5 million ($1.1 million), about 20 times what the median household earns in a year”.
” Vancouver isn’t the only place in the world, or even in Canada, where house prices have soared beyond the reach of residents: it’s happening in the global economy’s poster-towns, like London and San Francisco, and in less-feted Auckland, Stockholm and Toronto too. A common thread that links such cities is curbs on the availability of land for building. Yet as the Vancouver boom turned into a crisis of affordability, and authorities moved to tackle the problem, housing supply wasn’t the direction they were looking”.
The approach in British Columbia was to pinch demand for housing by imposing a 15 per cent foreign-buyer tax on Vancouver property coupled with the tightening of restrictions on mortgage eligibility.While this cooled the market, it did not address the supply side, which is adding housing for affordability, economic job growth, and viability. As demand was capped, housing supply did not increase, moving Vancouver’s housing market towards “boutique” status-a nice place to hang out in, but pretty challenging to live in.
Director of the City Program Andy Yan noted that single family home ownership is “one of the highest paper-wealth vocations” in the City of Vancouver. While sales are down, prices are up on the east side of the city, and Mr. Yan does not see the foreign-buyer’s tax as limiting off shore sales. “It is more of a speed bump”.