When was the last time you read a pseudo-bureaucratic report that used the term gobsmacked? Well, that’s the term the British Columbia Real Estate Association (BCREA) used to describe the overwhelming reaction by the masses to the “rapid acceleration in home prices” in Metro Vancouver from 2002 to 2008.
Yep. Gobsmacked. And it’s actually quite appropriate. Prior to my visit this year, I just couldn’t understand how anyone would fork out north of $1-million for an outdated tear-down on a small lot. (I guess that’s how non-Torontonians feel about my home town’s real estate market.)
But after a brief visit—and lots of visual inspections—I can finally appreciate why: Land scarcity. There just not making any more land out there on the west coast.
And this is the focal point of a new BCREA report—and the counter-point to why foreign investors really aren’t the problem in Vancouver.
According to the BCREA, the data and analysis of sales from a number of sources show that foreign investment insufficiently impacts the Metro Vancouver market, “save for a small segment of luxury homes.” Yet, the BCREA concedes that there are no hard numbers on how many foreign buyers are currently in the west coast market—their assumptions are based on current available data and this data shows that foreign buyers make up only 5% of the current housing market.
As such, the BCREA “does not see a policy response to curb foreign investment as necessary for the public good at this time.”
Instead, they want zoning laws to change to accommodate increased residential densification in metro regions in the Greater Vancouver Area. (At present, densification is limited to about 25% in each neighbourhood, but a change in zoning may allow for up to to 35% densification.)
Interestingly, the BCREA was also quick to highlight the fact that 70% of nearly all MLS transactions in Metro Vancouver resulted in a final price that was below the average 2014 sales price of $738,000.
To read the full report, go here.
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