At long last, there seems to be some movement on an issue which affects almost everyone — the soaring cost of housing in Metro Vancouver.
While much of the attention centres on the City of Vancouver, where the problem is probably at its worst, it does impact everyone who is wanting to get into the housing market in the Lower Mainland and Fraser Valley, as well as those who have bought within the recent past. It also has an effect on renters, because rents are soaring as well.
A movement has got underway on social media, using the hashtag #donthave1million. A rally was held on Sunday to protest the high cost of housing as well.
Here in Langley, there has been a run on single family homes in recent months. Realtors report that new listings immediately get plenty of attention, with most selling quickly. Some sell for more than the asking price. One resident told me Monday that her home sold in five days, and over the asking price.
It is important to point out that single family homes seem to be the centre of attention in all areas of the Lower Mainland. There have always been a limited number in Vancouver. While Surrey and Langley used to be dominated by single family homes, such is not the case with new construction nowadays.
Many homes which are nominally single family actually house two or more separate family units, in suites and coach houses. Many people who buy these kind of homes have a limited ability to pay the mortgage, even at continuing low rates, unless they have a steady stream of rental money coming in.
In Vancouver, much of the focus has been on foreign money coming in and distorting the market. There is no question that money made offshore, primarily in China, has been moving into the real estate market — particularly in Vancouver, Richmond and the North Shore. This has boosted prices, and higher prices in the central core of the metro area definitely have a spillover effect on areas such as Langley.
Ian Young, who writes an insightful blog called Hongcouver for the South China Morning Post in Hong Kong, wrote a post last week whose title says it all: “Something is grotesquely wrong with Vancouver’s housing market, and the time for denialism is over.” It is filled with details and background as to some of the causes behind the overinflated market.
The provincial government seems reluctant to get involved in any way. It could easily do so, by changing the property purchase tax structure to ensure that buyers using foreign money to fund home purchases pay the tax at a higher rate. At the same time, it could reduce the tax for genuine B.C. residents, or expand the existing tax break for first-time buyers.
Both Victoria and Ottawa need to start collecting detailed statistics about home ownership as well. Doing nothing will ensure that this problem keeps growing until a genuine crisis comes along.