Demand remains high in Metro Vancouver amidst pandemic
How “chronic undersupply” is affecting Vancouver’s housing market
Ryan Garner
Livabl
While pandemic-driven demand remains high, lack of supply remains the biggest issue facing Vancouver’s housing market, changing both buyer expectations and the way realtors advise their clients.
There are currently less than 5,700 active listings across Metro Vancouver, according to recent figures from the Real Estate Board of Greater Vancouver. The lack of available inventory has caused bidding wars to intensify, raising the benchmark price for a detached home to more than $1.9 million.
“Single-family houses are no longer an option for most people in the City of Vancouver,” said Mike Stewart, a Vancouver-based realtor. “We’re seeing most of the sales activity and demand in the suburbs, and even more demand as you get further from the downtown core.”
Affordable Vancouver condos in scarce supply
The supply crunch has trickled down to Metro Vancouver’s condo market, which has seen its benchmark price increase 14 per cent during the last year, hitting $775,700, with a current sales-to-active listing ratio of 49.7 per cent.
Additionally, condo pre-sales in downtown Vancouver have been hampered by a lack of new projects due to government red tape and high construction costs.
“In terms of pre-sale condos, you’re not seeing a lot happen in the core of the city because the City of Vancouver is so slow to allow new supply to be built,” said Stewart. “And anything that is being built is super high-end because it’s the only way a developer can benefit from a financial perspective.”
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Despite rising prices, Vancouver hasn’t had trouble attracting high-end buyers. According to Sotheby’s International Realty Canada, the city’s luxury condo market saw sales over $4 million increase 137 per cent during 2021, while there were more than 1,600 sales over $1 million, up 171 per cent from the previous year.
However, those who simply can’t afford the high price point of luxury properties have been forced to search for alternatives outside the city. Statistics Canada estimates that Vancouver’s population decreased for the first time in 45 years during 2021, dropping by 6,780 for a total of 693,325.
Meanwhile, Surrey led B.C. in population growth last year, adding 13,004 new residents for a total population of 614,600. Nearby Langley welcomed 4,702 newcomers to reach 166,400 as people venture further from Metro Vancouver and into the Fraser Valley.
“A one-bedroom resale in Burnaby is probably going to be priced in the high $700,000s, so that’s not affordable for many people,” Stewart said. “But out in Surrey and Langley people are getting options that start at $400,000, which might sound extremely high for the rest of the country but out here it’s pretty affordable.”
Vancouver housing inventory prone to politics
Stewart notes that new housing supply has become a politicized issue in Vancouver, with the tug-of-war between NIMBYs and environmentalists contributing to lengthy project delays and “chronic undersupply.”
“You’re starting to see people like [B.C. Housing Minister and Attorney General] David Eby believe that more supply equals less expensive housing, and it would be nice to see that from city government,” said Stewart.
Eby spoke out against calls for additional taxes as a means to curb demand last month, claiming that a massive increase in housing supply is the best way to meet the needs of a growing population and improve affordability.
However, one bright spot to help alleviate the supply crunch has come from First Nations groups which own large tracts of land that are being used to construct new housing.
One example is the Squamish First Nation development Senákw, which aims to construct 6,000 homes on 11.7 acres of reserve land near the south end of the Burrard Street Bridge in Kitsilano. The project is expected to be Canada’s largest development on First Nation lands.
“The First Nations, quite frankly, are the only level of government that are actually stepping up to the plate and supplying housing in the numbers that are required across the city, and it’s wonderful to see,” Stewart said. “That’s the most exciting thing happening in the next five to 10 years in the City of Vancouver.”
For the time being, low inventory will continue to impact both realtors and their clients. And although the issue may be most prominent in Vancouver, it extends across the province.
“There just aren’t enough options out there for our clients,” said Stewart. “We did about 500 transactions last year and I have about 19 realtors across British Columbia that I send business to, and each one of them says lack of supply is the biggest issue.”
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