Posted by: wizardB
Actually, Vancouver's housing problems can be traced directly to 1986 and Expo, we wanted to show the world and we did, cheap real estate perfect for the picking of Chinese millionaires with nowhere to hide their ill-gotten money a compliant pair of governments and voila our current housing crisis. the solution is simple but politically and socially difficult to pull off, make foreign ownership of real estate illegal and give all foreigner who own real estate here 12 months to dispose of all holdings. The price will correct in short order and the developers will kick and scream but our children will be able to purchase a house somewhere near where they grew up. They'll have to work hard to afford one but it will be obtainable.
Our problems can maybe be traced back to Expo, but putting it all on Chinese millionaires is a trope. There are a lot of reasons why our housing prices are out of control and foreign money, including ill-gotten money, is only one of them. I do think that psychologically some of the buying frenzies we saw back in 2015-2016 had a significant impact on the market, but again it was not the whole story. For the most part, locals have been buying the bulk of the housing here.
Other factors include historically low interest rates over a long period and population growth. A few years back someone posted some data that housing starts are growing faster than population and some recent posts about housing had me curious about that so I did some checking.
From 2003-2021 there were 383,723 housing starts in Metro Van - that includes all types. Over the same period the population grew by 565,000 persons. Considering other factors like younger adults leaving the family home, it's fair to say that housing starts have either barely kept up or not kept up with population growth.
With where we are now, even a 50% drop in home prices would still not bring the market back into alignment with median income levels in Metro Van. I think a correction is bound to happen and on some levels am a bit surprised it hasn't happened already, but when it does I don't see a drop of 50%. Unfortunately the number one thing driving housing is population increase, and as long as Vancouver remains a desirable place to live and people with money are willing to buy at the current price levels things are not going to change and we can probably expect to see more price increases. It sucks, but Vancouver is not longer the sleepy hollow it once was, it is now and international destination and with that comes high housing costs.