Is more supply the answer?

Southseacompany posted a link to this story about housing supply in the Vancouver area.

“What’s causing the supply shortage is the restrictive single-family home neighborhood zoning on 85% of our residential land base. That keeps out young families, middle income earners and renters, who can’t afford single-family homes,” said Anne McMullin, president and CEO of the Urban Development Institute, Pacific Region.

“We clearly need a regional housing strategy with more homes for more people,” she added. “That means more high-rise apartments along rapid transit corridors and more townhomes, rowhomes [and] multi-family low-rises.”

But recent studies show the reverse is true: fewer people can afford to buy condominiums in the Metro suburbs that have seen the greatest increase in supply over the past two years.

Read the full article here.

57 Comments on "Is more supply the answer?"

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bullwhip29
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bullwhip29

zoning is not the only issue. with the swipe of a finger, the click of a mouse or a lightning quick message sent out on a variety of messaging apps, condos and other multi-family RE, not to mention every other class of real estate that is FBT exempt, are being scooped up by 1000’s of anonymous money changers from all over the world and in most cases before they are even made available to locals (or even in advance of land being rezoned and ground broken)

history
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history

Safe out here parked by the river, hunkered down inside the van.

Burnabonian
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Burnabonian

Yes empower the developers help us help ourselves.

Look at how well they did turning Yaletown and Coal Harbour and Olympic Village into vibrant, rich, and diverse communities.

KickThemOut
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KickThemOut

Your argument is flawed as usual. It’s no wonder why bears on this blog can’t understand what’s going on. Here is a basic primer:
https://en.wikipedia.org/wiki/Supply_and_demand

Hint: it’s not because there are too many condos that’s causing prices to go up so dramatically. If you think restricting condos and even reducing condos will help moderate prices then I got a solid Golden Bridge in SF to sell you for $1M.

history
Guest
history

Whats going on is that houses, condos, private Space, had been commodified. These places arent for living in, they are for trading.

Vehicles are for living in, because the combination of a private vehicle on a public road cant be traded/flipped.

Burnabonian
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Burnabonian

Precisely.

Developers convert otherwise perfectly serviceable family homes into sterile, austere single-bedroom concrete cubes in the sky.

These cubes are bought and sold like tulip bulbs or pork belly futures. They are sized and designed to provide convenient and accessible increments to traders…for the same reason that stocks split and for the same reason that gold is poured into bars and coins.

The most actual utility these units offer is that a few “lifestyle” types will warehouse themselves and their chattel in them during the time between a) getting their first job out of school and b) the first time their girlfriend misses two periods in a row and refuses to their generous offer of paying for the entire abortion.

Converting 10 x 5-bedroom family homes into 100 1-bedroom shoeboxes != increasing supply.

bullwhip29
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bullwhip29
the problem is and has been the demand part of the equation as it pertains to far too many foreign buyers looking for a mechanism to transfer billions in ill gotten gains (thereby making purchase price irrelevant) versus a place to actually live. this, in turn, has caused a dangerous ripple effect as buyers who have no business getting into the market in the first place jumping in head first with eyes closed and fingers crossed because of fear of being left behind. in the case of the condo/attached market, the process has become so packaged, organized, automated and now even more cost effective as a result of flawed policies (likely by design) that have been implemented by parties that have too much of a vested interest in keeping things as they are and willing to turn a blind eye… Read more »
Burnabonian
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Burnabonian

Correct.

If a bull’s thesis is “money launderers are doing it”, remember that to a money launderer a 90% loss is an excellent return.

They have risks to worry about but losing most of their money to commodity price fluctuations is not one of those things.

After all, how much do they lose in one night at the River Rock or the Starlight? And they pass billions through those institutions without even blinking.

If you think that “money launderers did it” and still think that you should throw your own money into the same market, consider that “acceptable losses” to that group are “almost all of your money but not your life”.

Simple Solution
Member
Simple Solution

Rezone the whole city. Busy streets (Broadway, 12th ave, 16th ave, King Edward etc ) for low rise condo or townhouse. Then allow smaller size lots for single family. IF they want to increase affordability this is how to do it. Allow 50 ft to subdivide into 2 25 ft lots and the 100 ft lots into 4 25ft lots and then we will have some increased supply. At the same time remove the painfully slow permitting process at the city and we will have a real increase in supply OR at least the opportunity to increase the supply QUICKLY.

bullwhip29
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bullwhip29

unfortunately the vultures have largely priced this into the various property catagories before rezoning has even occurred

Simple Solution
Member
Simple Solution

Need to speed up the process. If it takes 2 years to get a permit then the trickle increase of supply does not help at all. There needs to be a significant change in the scarcity of supply to make a difference.

YVR
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YVR

“Allow 50 ft to subdivide into 2 25 ft lots and the 100 ft lots into 4 25ft lots and then we will have some increased supply.”

That would just instantly increase the value of every lot in Vancouver by about 60% or more. In order to get the increased density you would have to tare the existing house down (which just went up 60%) and build two new houses (which cost a lots to build). At best you would get a similar priced SFH with half the lot size once it was all said and done with those lots that were not sub divided (most) costing way more.

Burnabonian
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Burnabonian

Canada has less population density than 229 other countries. Only 11 countries have *less* density than us.

Canada has 3.4 people per square kilometre whereas the USA has 33 people per square kilometre. And yet their real estate costs less than Vancouver’s by anyone’s measure.

If your realtor has told you that there is nowhere to build more houses in any area in Canada and you have believed him, I can understand why you would be confused about other subjects such as (random example) bridge sales.

Shut It Down Already
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Shut It Down Already

Have you been to Nunavut? Would you live there?

Burnabonian
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Burnabonian

You don’t have to go to Nunavut to find empty space.

Macau has 18,534 people per square kilometre
Hong Kong has 6,349
Canada has 3

Have you ever been to Google Earth?

Check out Canada
Check out BC
Check out Southwestern BC
Check out the lower mainland

ALL OF THEM ARE FULL OF BIG EMPTY SPACES.

YVR
Guest
YVR

“Have you been to Nunavut?”

No, but I bet houses there cost more than Phoenix.

Shut It Down Already
Guest
Shut It Down Already

Because of foreign money, or trickle down from those who cashed out of Vancouver and chose to move to Iqaluit?

franko
Member
franko

It’s not the answer with the projected rate of immigration.
But don’t bother Justin with that. He’s far too busy looking for things to apologize for.
Here’s a partial list of his apologies from google and wiki:
-past convictions against LGBT community
-residential schools
-blaming opposition parties for all our woes
-disrespect to the Sikh community
-Ukrainian envoy
-Omar Khadr
-Patrick Brazeau
-indigenous women
-elbowing woman
-Komagata Maru
-not mentioning Alberta in 150 speech
-Japanese internment
-for Alberta remarks
-turning away Jewish refugees 75 years ago
-Muslim headwear
-apologising for not apologising

If the mere performance of these announcements isn’t enough to make you puke, just remember that most of these apologies come with mindboggling amount$ of compensation, all funded by poor old Joe Taxpayer who will remain firmly in the crosshairs of CRA while dirty foreign money gets a free pass.

Dave
Member

Yes, the most outrageous thing in this whole housing bubble is that CRA is giving foreign money a free pass. It was unacceptable before but now it’s infuriating with all levels of government pursuing more sources of revenue.

bullwhip29
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bullwhip29

they cheat, you cheat, we all cheat…

not a sustainable and effective gameplan imho

Combat roach
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Combat roach

It is a cultural change, takes time to understand and adapt. Some large nations and economies are based on such sociopolitical system.

Shut It Down Already
Guest
Shut It Down Already

Perhaps the CRA are smart enough to realize that the effort:impact ratio is more favourable with tax evaders here.

YVR
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YVR

“Perhaps the CRA are smart enough to realize that the effort:impact ratio is more favourable with tax evaders here.”

Doubt it. If they are like any other government organization it is they are just incompetent with lazy workers.

UBC in Crisis Mode
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UBC in Crisis Mode

More supply would solve the problem? What a joke!
Vancouver, a world class city, as we are building for the World!

Dave
Member

I used to be of the belief that supply could solve this problem on itself. I don’t believe that anymore because patching that hole doesn’t fix the leak in the pipe, which in this case is the flow of foreign money into our City. It’s completely possible that foreign money would be happy to buy twice as many condos if we somehow could double construction.

Shut It Down Already
Guest
Shut It Down Already

If that were possible we’d see more than 5-10% of transactions go to foreigners. Which the stats say we don’t.

Simple Solution
Member
Simple Solution

The supply is increasing too slowly. Put a system in place that will speed that up and then supply will overcome demand.

bullwhip29
Guest
bullwhip29

Most international students leaving Canada after graduation
http://vancouversun.com/feature/how-international-students-are-filling-funding-shortfalls/chapter-4

>>> even more proof that students are only here to facilitate transfer of family money, get a cheap education, keep an eye on properties and kill remainder of time eating, drinking, shopping and mooching off the system with no intention of ever staying for the long term and contributing to society in a meaningful way (aside from propping up high end retail)

Simple Solution
Member
Simple Solution

They leave the “world class city”? Shocking!

KickThemOut
Member
KickThemOut

Would you rather make $200K CAD pre-tax after busting your ass for 10 years and living in Vancouver? Or make $200K+ CAD AFTER-TAX right after university and live in China? Is it any wonder most go back? The ones working in the company I’m working in are only there to get their citizenship card and then they are out of here. Why bust their ass (figuratively and literally) and have to suck off walrus like Harry Weinstein for a lousy $40K pre-tax when they can be back at home bossing people around and party all the time and make $200K+ CAD after-tax in China?

Combat roach
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Combat roach
Dude Chilling
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Dude Chilling

So Oracle was wrong yet again.

Oracle
Guest
Oracle

You believe that article? So you spend $60,000 a year to get an arts education or a chef education and leave Canada without getting PR and citizenship? RIGHTTTT!!

Dude Chilling
Guest
Dude Chilling

As an anonymous internet poster, you consider yourself to be a more credible source than those experts interviewed in that article?

Best place on meth
Member
Best place on meth

The house pumping Liberal shill isn’t wrong, he’s just lying.

Big difference between wrong and flat out lying.

Joe Money
Guest

The issue isn’t about supply of housing… but supply of money.

Central bankers have printed vast amounts of conjured money, doubling the world’s money supply. This causes asset inflation.

It may appear that the the value of assets, including real estate, have risen, but, in actual fact they haven’t… it’s the value of money that has fallen.

Burnabonian
Guest
Burnabonian

Correct.

This supply is also being restricted as rapidly as the world’s central bankers are able to close the valve.

Put away your delusions, most of which distill down to “a wizard did it and asians are basically wizards”.

Central bankers (wizards that they are) did it and they are currently *un* doing it.

stagnate
Guest
stagnate

good point, the values on condos is correlating to money supply. I’d like to put these foreigners and local speculators to the test by doubling construction. not going to happen though, I think our local developers are all too comfortable now not to mention all the problems with zoning, red tape and labour shortages.

Simple Solutiom
Guest
Simple Solutiom

the controlled supply is he issue

Simple Solution
Member
Simple Solution

How many detached homes are there in Vancouver? Tried doing some googling but couldn’t find anything. Anyone have access to that data or know where to find it?

KickThemOut
Member
KickThemOut

Simple Google search came up with the numbers and source immediately:
https://www.google.ca/search?source=hp&q=total+number+of+single+family+house+in+vancouver&oq=total+number+of+single+family+house+in+vancouver&gs_l=psy-ab.3..0i22i30k1.318.7282.0.7365.49.22.0.0.0.0.642.3190.0j5j3j5-3.11.0….0…1.1.64.psy-ab..38.11.3189.0..0j0i131k1.0.bo_ty3EXH98

Shut It Down Already
Guest
Shut It Down Already

There’s a breakdown by municipality here, which you’ll find as the top result when searching for “Vancouver housing stock”:

http://www.metrovancouver.org/services/regional-planning/data-statistics/housing-data-book/Pages/default.aspx

Table 2.1

KickThemOut
Member
KickThemOut

Info on Vancouver housing breakdown: http://vancouver.ca/files/cov/housing-characteristics-fact-sheet.pdf

Total detached housing in 2016: 41,330

41,330 total single family house in city of Vancouver in 2016!!! You think they are building more net new SFH in Vancouver?
647,540 total number of people in Vancouver in 2014.

And you wonder why housing are expensive. I’m sure stopping all condo developments will really help with Vancouver housing price drop. Never seen a bunch of more stupid morons than bears on this blog.

patriotz
Member

According to the same source the average household size in CoV is 2.2. What matters is the number of households who have a real need for a detached house, >= 4 persons IMHO. Total population tells you little about supply versus demand. That said a detached house in CoV has always commanded a premium over the suburbs and always will.

Simple Solutiom
Guest
Simple Solutiom

600 sq ft condos not the answer. Rezone all SFH to allow multiple homes and speed up the permitting process. Foriegn dirty money may be the problem but obviously nobody wants to deal with that… the controlled supply is the problem.

Simple Solution
Member
Simple Solution

My point exactly. The solution is to INCREASE supply quickly. Why not rezone so instead of a 5000 sq ft monster mansion the same piece of land land can have 4 – single floor 2000 sq ft flats on it? IF they wanted to solve the problem they would. It is very easy to do so.

The problem is there is no incentive for them to fix it. The current system of development being controlled by a few players ensures supply will never overtake demand

Diadora
Guest
Diadora

More Casino Gate: A Gaming Policy and Enforcement Branch investigation found that a casino high roller “passed $100,000 in chips to Chang (Richard Chang has been a councillor in Burnaby since 2008).”
http://bc.ctvnews.ca/mobile/ctv-exclusive-burnaby-councillor-investigated-for-suspicious-casino-activity-1.1809017

Burnaby
Guest
Burnaby

This explains a lot about why the extensive redevelopment is occurring in Burnaby around Metrotown and Brentwood. Corrigan and the Burnaby City council are in the developer’s back pockets and with this Chang guy now as a suspected Chinese money launderer it ties together. I’m convinced Corrigan is corrupt and he certainly is arrogant because every time a reporter questions him in a negative way he calls them names and belittles them and will not answer any question in a direct manner.

Dave
Member

Maybe it’s because he’s got nothing to lose at this point, meaning business has been lucrative.

Dave
Member

Welcome to the goody room:

https://www.youtube.com/watch?v=uvkuLe-s_po

This is happening in every municipality in the Lower Mainland and it already has happened with the new government in Victoria.

Ask and you shall receive.

BC has always been a banana republic. The old Vancouver Stock Exchange never actually shut down. The scammers took the operation Province Wide.

The best job in BC right now is to run for politics and get paid out in casino money, gold, bitcoin or condo pre-sales.

Vancouver real estate is now the biggest penny stock market ever in the history of the World.

Oracle
Guest
Oracle

Hahahahah. Why is anyone surprised? Check the foreign bank accounts of relatives.

Combat roach
Guest
Combat roach

There’s nothing else going on in LM but misbehaviour of those fucks more or less. Did we all become hostages of all those unscrupulous lowlifes who showed up here to launder, park, study, gamble, invest, flip, shop, falsify, cheat, practice traditional crap, leach public services, get benefits, and rest of their usual activities? It is like having some distant semi-retarded cousin over who finds alright to jump on the table in the middle of dinner and take a dump, while others eat, it’s awkward, it smells badly, it’s all covered with shit but everyone is silent, still eating, understanding, and politically correct. Shame where greedy and corrupted system got us…

paulb
Member
Active Member

New
176
Price Change
77
Sold
144
TI:9982

http://www.clivestevepaul.com

MarKoz
Member

The article is flawed.

Two key factors to be considered are:
1) What is the demand vs. the supply? and;
2) What is the growth in new households in the areas under study?

Those facts can tell you how much speculative activity there is and how much demand is driven by an actual increase in households. All very relevant and left completely unaddressed by this article.

Best place on meth
Member
Best place on meth

Teranet September stats show Toronto prices have begun a freefall.

https://housepriceindex.ca/#maps=on_toronto

The best is yet to come courtesy of OSFI.

Harry Wang
Guest
Harry Wang
Doomcouver
Guest
Doomcouver

The slow creep of ethnic cleansing in the GVR continues unabated. The Liberal government needs to realize with the number of immigrants they’re letting in they’re essentially giving China control over our west coast. Get a critical mass and they can vote to secede from Canada. Without any melting pot, the feds are inviting disaster. They don’t care though as long as the Chinese bring lots of cash.

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