KENNETH CHAN (DAILY HIVE) - The results of a survey independently conducted by Vancouver mayor Kennedy Stewart find strong support for rental housing density in the city’s neighbourhoods.
According to Stewart’s released findings this week, 80% of respondents indicate they support the construction of a six-storey rental building in their neighbourhood.
Support levels were also consistent on two other queries; over 84% said they support the construction of duplexes, four-plexes, townhomes, and three-to-four storey apartments in single-family neighbourhoods, and 87% noted they support the municipal government’s incentives to builders to construct more rental housing.
“As your Mayor, I will continue pushing for the changes needed to deliver more rental homes, especially for those households earning less than $80,000 annually,” reads an email newsletter.
“From advocating for more private and public rental housing investment, to encouraging policy changes that will accelerate construction of a significant number of rental units over the long term, every day I am working to take on the challenges and seek out solutions to the housing crisis.”
This comes just weeks ahead of city staff’s release of the rental incentive review report on existing and new measures that will catalyze more rental housing construction.
By the municipal government’s own admission earlier this month, it is falling far behind its 10-year goal of approving 20,000 secured market rental units between 2018 and 2027. To date, just 2,502 secured market rental units have been approved since the strategy came into force last year.
Over the first three quarters of 2019, city council approved 687 market rental units, which is a third of the annual target of 2,000 units. Two thirds of these units relied on various city rental incentive programs, such as Rental 100 Secured Market Rental Housing Program and the Moderate Income Rental Housing Pilot Program.
But in their approval streams through city council, they were also dogged by controversy over the level of incentives to developers and the perceived unaffordability of market rental rates.
In fact, one councillor — Jean Swanson — has voted against all 13 market rental housing projects considered by city council to date. And in April, after much debate, city council voted 8-2 against Swanson’s motion of culling the financial incentives of the Rental 100 program.
At the moment, Vancouver’s rental vacancy rate is hovering below 1%, with the resulting supply shortage pushing up rental rates.
Stewart says his survey was conducted online and attracted 1,700 respondents. It should also be noted that this was a non-scientific survey.
JOANNAH CONNOLLY (VANCOUVER IS AWESOME) - Residential property sales and average home sale prices in Metro Vancouver are likely to increase over the next two years, according to a new forecast by Canada Mortgage and Housing Corp. (CMHC).
Resale activity on the region’s MLS, which has seen significant year-over-year growth over the past few months, is predicted to continue that streak in 2020 and 2021. This increase in sales and demand for product will push up prices.
Although the housing agency described the expected price rises as “modest,” CMHC said the average price of a home (all property types) in Metro Vancouver in 2020 could potentially reach a record high of $983,000, and over $1 million in 2021. That compares with a forecast average of up to $928,000 in 2019, and average sale prices of $966,866 in 2018 and $934,977 in 2017.
However, those predicted prices are at the top end of the forecast range — CMHC said it was also possible that average sale prices would continue to slide slightly over the next two years (see graph below), perhaps even to as low as $883,000 in 2021.
CMHC said that townhomes and condos priced under $700,000 were expected to see the strongest demand over the next two years. “Meanwhile, conditions in the single-detached market are expected to remain soft, particularly in the higher end segment of the market.”
The report added, “While inventories of homes for sale are expected to decline slightly as sales increase, a growing number of newly constructed homes coming onto the resale market will help keep market conditions balanced overall through the end of the forecast horizon.”
Responding to the report, Jason Wong, sales and marketing director at Aragon Properties, told Glacier Media, “We are expecting to see upward pressure in pricing in the market, due to projected economic growth and annual population growth, along with the low interest rates. The fundamentals are definitely there to see price growth.”
Metro’s new-home marketOn the presale condo market, CMHC predicted, “New condominium apartment developments are expected to see greater presale activity compared with the longer sales periods of recent quarters, which will encourage additional new development; however, pricing will increasingly be a point of differentiation as consumers have more options in a rising inventory environment.”
However, Wong said he believes there is plenty of “room for a lot of new product” before price growth would be affected. “The Lower Mainland needs a lot of new housing. There is a lot of pent-up demand and it would take a lot of product to satisfy that demand. And we have to recognize that these homes are also not built yet.”
Wong added that Aragon had seen strong presales at its recent condo projects in Vancouver, and was confident about launching a new project in New Westminster’s Port Royal in spring 2020.
B.C. and national pictureAcross B.C., the resale market forecast was a similar story to that of Metro Vancouver, with sales and price growth expected in 2020 and 2021 after a weak 2018 and 2019.
The federal housing agency reported, “British Columbia will see modest recovery in price growth in 2020 from a decline in 2019, but rise to the second-highest rate of price growth, after Ontario, in 2021.”
This prediction echoes that of the B.C. Real Estate Association, which forecast recently that home sales would increase in every B.C. region over the next year.
The CMHC’s national forecast was also similar, albeit at lower average price levels. Bob Dugan, CMHC’s chief economist, said, “Housing starts [across Canada] are projected to stabilize in 2020 and 2021 at levels in line with long-run averages. This follows two years of declines from elevated levels in 2017. Resale activity and house prices are expected to fully recover from recent declines, supported by growth in income and population.”
The national average home sale price was $511,830 in 2017, and CMHC predicts it will be approximately $488,000 this year. CHMC said the average sale price could be between $539,800 and $569,600 in 2021.
The agency’s Canada-wide forecast report added, “The current outlook for renewed growth in home prices over the forecast horizon does not imply that overvaluation and/or price acceleration measures will necessarily worsen, since growth in fundamentals over the same time period can be sufficient to support stronger resale market activity and price growth.”
DAN TOULEGOET (WESTERN INVESTOR) - Vancouver has been ranked Canada’s #1 market for real estate investment in 2020, in the annual PwC Canada Emerging Trends in Real Estate report, released this week.
In the “Markets to Watch in 2020” section, the report authors said that “despite some headwinds, Vancouver re-emerged at the top of our survey this year for overall real estate prospects.”
The report observed that Vancouver’s office and industrial sectors were both doing “particularly well” with very low vacancy rates and robust development.
It continued, “Looking at the housing market, the long-term trends remain favourable. Recent softness is largely a reflection of a correction from an overheated environment and policies that have caused investors, whether foreign or domestic buyers, to exit the market.”
PwC’s report added, “The [Vancouver housing] market rise was too strong, and now it is reacting to that. However, by the time it is done, it will be in line with where a steady increase should have gotten us over the years… With a strong economy and population growth, Vancouver remains a desirable place to live that will eventually draw buyers back into the market. The question isn’t if, but when, they’ll come back.”
Toronto was ranked in the #2 spot, followed by Ottawa, Halifax and Montreal rounding out the top 5.
Of the Western Canadian and Prairie cities, Saskatoon came in sixth place, Edmonton eighth, Winnipeg ninth and Calgary 10th. The other Canadian city to make PwC’s top 10 was Quebec City in seventh spot.
Click here to see the online version and download the full report.
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