A column that only Ian Young could write:

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Young

The realisation that something is grotesquely awry with Vancouver’s housing market has reached a tipping point.

Fuelled by the special sauce of Chinese wealth – and good old Fear of Missing Out – prices have decoupled from the local economy, with an average detached price of about C$1.4 million (HK$8.9 million). So far, so normal for Vancouver.

But the past couple of months have witnessed a kind of awakening. …

Foreign money might be a factor, concede some, but it must similarly influence other markets, right? Not really – since immigration data demonstrates that the influx of rich immigrants to Vancouver (80 per cent of them Chinese) is unmatched by any other city in the world, at least in terms of wealth-migration schemes that clearly define asset benchmarks.

Others seek to frame unaffordability as inevitable, since Vancouver is a city of limited land supply. But plenty of other cities are in the same boat: New York and Singapore spring to mind. Both are expensive cities, but Vancouver has left them in the dust in terms of unaffordability. …

Surely Vancouver has always been unaffordable? A quick check of the stats will show that as recently at 10 years ago, Vancouver’s price/income ratio was in dancing territory, at 5.3.

As for the perennial low-rates argument, pretty much everywhere has low rates. It tells us nothing about what makes Vancouver’s market special.

An exceptional cause must be found for an exceptional situation, and for Vancouver, that can be found quite easily in wealth migration, which exploded in the past decade.

Vancouverites still struggle to grasp the scale of this influx to their modestly-sized city. From 2005-2012, about 45,000 millionaire migrants arrived in Vancouver under just two wealth-determined schemes, the now-defunct Immigrant Investor Programme and the still-running Quebec Immigrant Investor Programme. Let’s put that in perspective. The entire United States only accepted 9,450 wealth migration applications in the same period under its famous EB-5 scheme, likely representing fewer than 30,000 individuals.

So, Vancouver has recently received more wealth-determined migration than any other city in the world, by a long stretch. This, in a city with some of the lowest incomes in Canada. …

Foreign buyers probably aren’t to blame for Vancouver’s unaffordability. But foreign money probably is. And cracking down on the foreignness of funds will prove much harder than dealing with the foreignness of buyers, even if the will to do so exists. …

Another factor often neglected is that a successful “fix” for unaffordability would crush a great many people, probably as many as it helps. In peril would be a real estate and development industry that employs thousands. Anyone who already owns a home would also be at risk. Thousands of elders banking on their homes as a retirement nest egg. Thousands of recent buyers facing the terrifying prospect of negative equity, with mortgages far exceeding the value of their homes.

It’s no surprise the politicians are treading carefully. …

Wherever you stand on the matter, the time for denialism is over. At the very least, Vancouver deserves its long-overdue debate about the root causes of the unaffordability crisis, and what to do about it.

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Comments

    1. How sad to see developers are just as capable of wrecking a two thousand year old World City, as they are our own humble 129 year old backwater.

  1. Perhaps too much emphasis is being placed on detached homes sitting on a 4,000 square foot parcel of land, otherwise known as the standard Vancouver lot. Detached homes are prevalent on 70% of the private land in Vancouver, yet where do you find 4,000 square feet of land with a detached house siting on it in Manhattan, Hong Kong, Singapore or London?
    The realization that detached homes on standard lots were unaffordable came to a lot of people years ago. Where has the author been? Perhaps a more fair comparison of average housing prices for average folks in “world class” cities today should be made by first eliminating all detached houses, waterfront or primary view locations, anything above 1,500 square feet of interior space, and those with ostentatious appointments (i.e. the targets of wealthy investors). What are left are thousands of ordinary condos and townhouses. What are missing are attached housing options consuming far less land than the new standard model of unaffordability cited so much today.

  2. “An exceptional cause must be found for an exceptional situation”

    Except we aren’t that exceptional. Yes, yes, we’re all precious snowflakes and all cities are special and unique, but this housing bubble has caught all of Canada and other countries. When you factor out the common factors, how much of the problem remains? If prices were to come back into line – a drop of 30-40% – how much of a Vancouver-specific problem would we be talking about?

    If no one can quantify the issues, how can you attempt to fire out solutions?

    1. It is relevant that this “housing bubble” survived the second deepest recession in the last 100 years with a small dip.

      Some bubble.

      1. When I moved to Burnaby in the late 80’s the same talk about bubbles could be heard. Who can afford a $250,000 bungalow in Burnaby ? Prices must come down …

        Now that bungalow is $1M and will be $2M in less than 20 years. So, rather than waiting and complaining about this “bubble” why not buy one and ride the wave ?

        Don’t wait to invest in real estate – Invest in real estate and wait ! (TM)

        1. Haha. Awesome, I didn’t know it was that easy! Sounds like a fun little game! Anyone can play! Just over extend yourself to the max and borrow against your pitiful wage for a condo in Surrey so you can commute into Vancouver for 3 hours each day. Tie up all your cashflow in the most Illiquid asset imaginable so you can’t afford to enjoying anything else in life. BTW Thomas good like competing against the Chinese buying up aging apartment blocks that keep your little property investment pyramid scheme afloat.

          1. Real estate is fairly liquid, especially in decent locations. Immigrants will keep coming here and MetroVan will be 4-5M+ people in 25-30+ years. In a city like that prices of real estate will not come down !

            As such, I conclude: Your worldview is incorrect. Consider changing it.

          2. Totally disagree, these numbers of 4-5 million are pie in the sky. The reality is Canadians aren’t moving here in large numbers because the economic prospects and cost of living are not favourable. From 2006-2011 Vancouver was in the middle of the pack in percentage growth (9.3%) compared to Calgary (12.6%) Edm (12.1%) Sask (11.4%) Moncton (9.7%) Toronto (9.2%) Ottawa (9.1%). The Chinese may be buying up all the houses but that does not mean they can just move here, we still have immigration policies. True story: my Chinese coworker said 3 friends moved to Vancouver from China and they couldn’t stand the weather in the winter and moved back. Not sure why people think this place is Los Angeles before they move here but upon arrival the awful rainsoaked winters bring out the return tickets or sunlamps if they can’t leave. So I think those numbers are rubbish.

    2. Exactly. Housing prices in Winnipeg have doubled in the past 10 years (a higher growth rate than Vancouver). The main culprit is record low interest rates for a ridiculously long time, not foreign investment.

      1. Thats BS. Show me the data that shows foreign ownership isn’t the problem. Oh that’s right, there isn’t any data, why is that?. In Winnipeg are homes left empty while they are sold 3, 4 times with no one every living in them to launder money? Are homes over bid on by 400k? You need to hang out with some real estate agents who will talk candidly about what is really going on or spend time with a demolition contractor working on the West side

      2. BTW, Veggie did you even read the article? If so how can you say Foreign ownership is not the main culprit when you read this:

        “From 2005-2012, about 45,000 millionaire migrants arrived in Vancouver under just two wealth-determined schemes, the now-defunct Immigrant Investor Programme and the still-running Quebec Immigrant Investor Programme. Let’s put that in perspective. The entire United States only accepted 9,450 wealth migration applications in the same period under its famous EB-5 scheme, likely representing fewer than 30,000 individuals.

        So, Vancouver has recently received more wealth-determined migration than any other city in the world, by a long stretch.”

        1. By your numbers, Vancouver is the receiving most of the world-wide wealth immigration, and yet housing inflation is not a Vancouver-specific problem. Do a search for “first time home buyer priced out” and you’ll find articles from across Canada, Australia, and the USA.

          As a renter, I’m all for whatever will reduce housing prices, and foreigners sound like an easy scapegoat, but I’m not sure it would do anything.
          Australia has had foreign ownership restrictions since 1979 and they haven’t stopped housing prices in Melbourne from booming, just like in Vancouver.
          They’re making the laws tougher, but it’s not having any effect on prices.
          http://www.theglobeandmail.com/report-on-business/economy/housing/is-australias-crackdown-on-foreign-real-estate-ownership-a-model-for-bc/article24325255/

          1. They have negative gearing which institutional investors use, big difference. Look it up.

        2. I’d love to blame foreigners for Vancouver’s problems, but I know I’m part of the problem. I moved to Vancouver 10 years ago. I put up with the high cost of living and lower wages, because of the bikability and high standard of living. My wife and I have looked into buying. We could afford it, but have resisted because it seems like a bad investment and if interest rates did rise we would be screwed. That hasn’t stopped many of my friends (all in their early 30s) from buying their first home. 10 years of saving at good jobs and you can still afford to buy in Vancouver. From my perspective, that is the cause of Vancouver’s high housing prices. No matter how high they are, average people are still willing to pay them, and there are thousands of renters like myself who are waiting for prices to drop to jump in ourselves.

          http://www.theglobeandmail.com/report-on-business/economy/housing/remember-when-what-have-we-learned-from-80s-interest-rates/article24398735/?fb_action_ids=10101225658548467&fb_action_types=og.shares

          1. House prices or condo prices in good locations will not drop, due to continuous demand and low interest rates for a decade , likely 2.

            Vancouver is quite affordable outside of single family homes or close to water. 2BR condos of about 1000 sq ft in Burnaby, New West, Surrey or further out can be had for below $400,000 or less than $1600/month with 10% down .
            Expectations of owing a single family house close to each or downtown without dual decent incomes need to be adjusted.

            Foreign ownership of land incl single family houses need to be severely restricted or taxed far far higher though as it is a major contributing factor !

        3. Ron, a few little facts that may have escaped your attention:

          -the housing “bubble” started several years before 2005

          -there is no reliable information that proves 100% of the recent price raises is caused by “wealthy foreigners”; certainly a minority, but not a majority

          -rich Asians arriving here do not explain the known effect on prices by demographic pressures, geographic constraints and inefficient land use in areas zoned for detached homes that squeeze the land supply

          -the term “unaffordable housing” refers to detached homes (a rarity in the cities regularly compared to Vancouver) and waterfront or view condos; they do not refer to the majority of ordinary condos and rental apartments

          -though ordinary condos and apartments are affected by any market forced upward by speculation, they remain affordable compared to the others

          -the single detached home on a standard lot is indeed permanently unaffordable, a fact of life that has yet to be acknowledged; acknowledgment is the first step to acceptance and the ability to move on and discuss alternatives

          -banning all wealthy foreigners will not shave 20 years off the housing prices; it is merely fulfilling an ancient human tendency to blame others

          1. MB:

            Here are my responses to each point:

            1. The housing bubble in Vancouver has gone parabolic in the last 1.5-2 years and has separated from housing bubble charts in cities around the world due to, first the Bank of China easing foreign currency restrictions and second the crack down on corruption by President Xi Jinping.

            2. There is no reliable information that proves 100% of the recent price raises is NOT caused by “wealthy foreigners”;

            3. There are simply not enough people moving to Vancouver from other parts of the country to drive prices up parabolic as seen in the last 6 months without outside influence. However I do feel there is a great deal of panic buying by Canadians to stay ahead of the Chinese buyers which is adding to the speculation.

            4. All forms of housing and rents are being driven up region wide. The increases may not be as large in the condo markets but the stagnant wages are a serious issue. Also with commuting times and costs going up moving out to the valley for cheaper accommodation is not an option that will remedy the issue. Per last week in Price tags, Chinese investors are buying up older affordable apartments in Burnaby and tearing them down in favour of new apartments marketed offshore and when rented are double the price.

            5. Same as above.

            6. Agree. But why do neighbourhoods have to become vacant and heritage torn down for hedging currency flows? Proper taxation is the issue.

            7. Again, taxation is fair. Agree we can’t reverse the prices to 1990 but we sure as hell can get some money out of it. Oh, and love this guys idea:

            http://www.vancouversun.com/business/system+cool+housing+bubble+Vancouver+immigration+lawyer/11070100/story.html

          2. Wealthy owners in $4M+ houses do not necessarily have wages in Canada as often they have companies, and declare wages elsewhere. Vancouver is a great place to work FROM, but the business is often elsewhere (a mine in Peru, an import-export firm HQed in HongKong, a manufacturing firm in Iran, oil wells in Alberta etc.)

  3. Bloomberg Economic Series Canada: 22 May 2015

    “…Developers in Toronto are building 97 residential towers — some as high as 92 stories — more than any other city in North America including New York City …”.

    The severe recession in 2008 hardly affected Canada. The Conservatives of Jim Flaherty and Stephen Harper steered Canada through with flying colours and the world noticed. Canadian banks are considered among the best. Developer Sam Mizrahi, president of Mizrahi Developments. “Canada’s seen as the new Switzerland.”

    CBRE says that prime residential square foot cost in Toronto is $1,225 and $1,368 in Vancouver. Paris is around $2,000, London $3,600.

    1. Please note that the figures for Paris or London do not refer to detached homes on 4,000 ft2 lots. If they did exist in those cities, their prices would be several times higher overall.

    2. On the other hand, it looks still possible to buy a house for less than a €1M (~ €8500/sqm) in Paris city:

      The houses (could be called fee simple house) are ~100sqm and look like below:
      http://imganuncios.mitula.net/vente_maison_3_chambres_5_pieces_100_m_a_paris_75019_8950063422583594851.jpg
      (that is in the Mouzaiza district)

      and surprisingly Paris seems to have more of them than Vancouver.

      Here, the city seems to make sure you can’t buy/sell house small house/land : I guess the reason is it could make land assembly to the benefit of big developper more complicate

      1. An excellent portrayal of the very alternatives to the standard lots with detached houses in Vancouver.

        I note that the E1 million translates to about CAN$1.25 million, and that’s with a postage stamp back yard and probably zero front lot line clearance .

  4. It wasn’t too long ago on this very blog that anyone insinuating foreign money played a role in housing affordability was shouted down as a racist. It’s nice to see the reality of housing outpricing wages addressed, although I take issue with this:

    Another factor often neglected is that a successful “fix” for unaffordability would crush a great many people, probably as many as it helps. In peril would be a real estate and development industry that employs thousands. Anyone who already owns a home would also be at risk. Thousands of elders banking on their homes as a retirement nest egg. Thousands of recent buyers facing the terrifying prospect of negative equity, with mortgages far exceeding the value of their homes.

    I disagree that thousands would be in peril should the market correct itself. Most of those elder’s homes would still be worth several times more than what they paid. People will still make money in real estate. The difference is there would be less wealth inequality; people wouldn’t have to spend such a large percentage of their incomes on housing and that money would go back into the local economy. Wealth wouldn’t be so concentrated at the top. Yes, some people who overpaid in the last few years would be at risk, but protecting a terrible decision that relies on a vast number of people spending too much of their income keeping a roof over their head and drives out families, pensioners, younger people and all those in between who aren’t rich is not what we should be doing – the government’s role is to balance interests for the greater good, not protect the interests of the wealthy at the expense of everyone else. It is only the last ten years, particularly the last five which have seen such unnatural gains. I’m glad people are finally waking up and recognizing there’s something very wrong with this picture.

    1. Jen, too many complaints, no solutions. Glibness without imagination. A lot of noise, a vacuum for signal.

      Because the world doesn’t owe you a living, what are your solutions? Close the airport to all wealthy foreigners? Build the Great Wall of Vancouver? Plow up the ALR for subdivisions? Level the mountains and fill in the sea to create “new” land? Invent a time machine set to 1960? Confiscate all development built since the turn of the century and distribute them to the masses earning less than $50,000 a year?

      You’re hallucinating if you think today’s housing prices will come down by leaps & bounds short of world-wide deflation or a great earthquake.

      We had the second deepest recession in a century in 2008-09 and the prices came down by what, 15%? What does that tell you? There is no bubble, the values are real. Get over it already.

      I suggest you stop dreaming about buying a detached bungalow with a big back yard for you or your family alone while paying 1995 prices and admit that you need to devote your energies to more realistic strategies like:

      -stopping the instant gratification meme of today and assume a mantle of planning 30 years ahead; even just $50 / month put into RRSPs today will mature handsomely over 30 years;

      -accept condo or rental living, just like every city Vancouver is compared to; even in downtown there are families and over 5,000 children and the schools have waiting lists; there are more condos in low and mid-rise buildings than towers

      -do some research into mingle suites or suites with internal rentable suites; mingles allows two mortgages (sponsored by VanCity) in a condo with two larger ensuite bedrooms and common kitchens and living rooms; SFU UniverCity pioneered two or more bedroom suites where one ensuite bedroom with kitchenette has a separate entry to the main hallway but is part of the larger suite

      -look into buying a duplex or dividable house jointly with spouse / friends / family under a good contract (that last point is crucial); many people have done this, a lot more rent entire houses for years with good friends and enjoy the amenities of detached housing with backyard gardens but without the mortgage

      -save or borrow the minimum down payment (preferably the former) and purchase a house with a spouse or a friend / relative under a contract with at least one suite; live in the smallest suite and rent out the others and put the rental income into the mortgage; or rent all the suites for a few years while you pay down a chunk of the mortgage principle before moving in yourself

      -regarding the last item, be prepared for blood, sweat, spit, pus, lost fingers, scars and tears by taking on repairs, permits and tenants; it’ll be hardest job you’ll ever assume and will destroy your overly romantic misconceptions about home ownership (rot, asbestos and poor foundations / electrical / plumbing are biggies), blow your budget by two or three times, and decrease your good will toward others after dealing with a multitude of tenant issues over the years

      -do the math; declare your rental income and put every nickel on the mortgage principle; every extra dollar put on the mortgage early is worth two dollars in interest savings at the end, and that could be worth $100,000+ in savings over the 25-year amortization, not to mention the extra years not paying a mortgage when you are ageing; make extra payments on the mortgage instead of taking trips overseas or buying a new car you don’t need, prepare to do without and you’ll make up for the sacrifices several times over in the long run

      -once a decade or more has passed then you could consider trading up, but not to a detached home on a big lot; instead become an advocate of using residential land more efficiently and promote the subdivision of standard and large lots into half or third-lots and narrow house provisions, and rowhouses, low rise and mid-rise where appropriate; it is entirely possible with sound site planning and imaginative architecture to retain heritage houses (but perhaps shift them on the site) and trees while recycling materials from non-heritage homes into new rowhouses and low rise condos; creating 40 rowhouses or 60 condos from 10 lots is completely doable while respecting neighbourhood character, just don’t expect a big back yard

      Regarding incomes, you need to be more patient. Income is related to education and experience, and with Boomers starting to retire en masse positions will open up. Just don’t expect to attain management in less than a decade, because Boomers take with them a wealth of experience that needs to be filled. Boomers will vacate more jobs than there are new people to fill, ergo higher wages. Immigration will help fill those vacancies, but locals with education and some experience in a particular field can compete well for many vacancies in skilled jobs.

      On the Bulablog recently you brought up a lot of related stuff on protecting open space and the tree canopy, while lamenting unaffordable housing prices and the loss of urban tree cover, too many points to comment on here. The comments section there was not the right format for a detailed rebuttal, especially when fomenting war against Boomers. Perhaps another time and another place, as long as there ain’t no war.

      1. Well said !

        That should be read in every high school to every student !

        Ayn Rand could not have said it better.

        Btw: do they actually read “Atlas Shrugged” in high school or watch the movie, or just the Inconvenient “Truth” movie ?

      2. Mb, first off, thank you for taking the time to write out your comment, I really appreciate it. I do fear that you have my personal aspirations wrong; I have accepted rental living, I don’t have children, but that should not negate what I’m trying to tell you. It appears to me that the first part of your statement assumes we are overpopulated or have a physical shortage of homes; statistics say otherwise. We don’t need to develop to ALR or fill in the ocean – I reject these notions as generally coming from a cohort who benefit from the current conditions and are trying to distract or explain away attention on the matter . First off, some scrutiny is required on these gains in real estate. You are asking people to make serious sacrifices and engage in very, very, risky practices that will affect them their whole lives, just trying to put a roof over their head. Isn’t it worth examining why?

        I’m not looking for 1995 prices but would you please, please admit that the gains of the last decade are unnatural, affect all types of housing, and have an impact on the local economy?

        I’d be extremely nervous to spend $500,000 on a condo that will depreciate every year. What are you left with at the end of your mortgage? Please answer this question. The trade-off of condo living used to be, among other things, that they were much much cheaper to buy. They are not cheap anymore and the reality is that people are being driven out of Vancouver. Rowhouses and townhouses would be great if land was not so expensive and if the final outcome wasn’t still unaffordable. It has truly come to a breaking point, I think.

        1. Plenty of condos sub $300,000, too in MetroVan. Most will not depreciate. Why would they ?

          The house prices over the last decade (both here in Vancouver and elsewhere) or so are NOT unnatural, just a market reaction to
          – lower and lower interest rates (that will be with us for quite some time)
          – higher and higher land costs
          – higher and higher land servicing costs due to city’s levies
          – less and less single family houses available close to city cores as land was rezoned to multi-unit
          – immigration to safer places, with functioning governments and clean air, away from turmoil places (and there are quite a few in this world now)
          – boomers retiring and not moving away and their kids wishing decent housing, too
          – more and more people living in cities as a % of population
          – generally decent economy in Canada, as opposed to many other parts of the world
          – higher material & labour costs that made new housing, even multi-unit, more expensive per sq ft

        2. The gains of the last decade are not unnatural. Detached housing in Vancouver has been going up, on average, 10% per year since the mid 1960s. Suburban areas opened up by highway building have appreciated even faster. Denser forms of housing have appreciated slower.

          What you perceive as unnatural is the disconnect between wages and housing prices. The market no longer operates in a vacuum. Prices aren’t set by local people’s ability to pay, but by those who view residential real estate as an investment rather than a place to live.

          A few decades ago we saw massive inflation across the economy. A 10% increase in land values was matched by increases in the cost of everything else and dwarfed by lending rates similar to today’s credit card rates (18.9% and higher). Borrowing money to buy investment real estate was a foolish endeavour.

          Now money can be borrowed at 2.74% and investors can make gains even if they leave the property empty for years. Those who choose to rent their investment portfolio can make substantial profits even if housing prices were to stall.

          We have also seen significant changes in government policy. Chicago school economics that espouse capture of economic gains by those at the top of the pyramid have become the norm across the industrialized world. Real, inflation adjusted wages for the bottom 90% of the population have remained mostly stagnant for decades.

          So while prices continue their upward movement the gap between what people want and what they can afford continues to grow.

          None of this requires as much as a single foreign investor. There are enough rich people in North America to buy up all the land in Vancouver and then some. The arrival of investors from the rest of the globe is only accelerating things.

      3. Jen, I know it’s very frustrating to see housing prices climb and climb, but when you can build a city on only ~30% of the land in the Metro without running into vital watersheds, parks and the ALR you then have a land supply issue, even without the local speculation and foreign money pouring in. The market response in price, though aggravating and steep compared to cities that aren’t half as attractive, is not in my view unnatural.

        I believe that wealthy foreigners buying up condos and detached luxury homes would explain only a part of the price rise, but there does seem to be an overreaction building to legislate against them. I suggest that immigration and tax policies would not lower prices by much, maybe a dip or a cap at best. That might be a hard lesson because it means that everyone needs to adapt.

        We are far from being overpopulated. We have an inefficient land use problem. As an urban designer I see that it is imperative to learn use our increasingly expensive and limited land less wastefully and more judiciously as an important adaptation method and avoid offensive social policies geared toward one particular group, or reactionary land use decisions that we will surely regret in future, like carving off hunks of the ALR. When something you need is expensive, then you use less of it.

        The standard Vancouver lot seems wasteful when seen in the context of a crimped land supply and higher prices. Therefore, zoning for standard lots and detached houses are prime targets for reform. As mentioned above, converting 10 standard lots into ~60 average-priced apartments contained in one or two low rise buildings is quite feasible with the right design and without, in most cases, sacrificing heritage or veteran trees except where all the houses are heritage rated. Community acceptance may be harder deeper into a neighbourhood, but I feel using the first block or two off the low and mid-rise high streets would gain acceptance if they offered a mix of low rise strata condos and decent rental. Moreover, a three-story walk up a block from a transit arterial would lessen the need for parking and car ownership, and construction techniques that use bolt-together factory modular wall panels or quickly erected factory engineered timber framing will shave off weeks from the typical construction schedule and offer savings to owners.

        Regarding risk, without it you stay where you are. Have you actually tried to honestly compose a plan and calculate risk through several scenarios? Have you actually done the footwork, research and crunched the numbers on $300K condos (note there are many listings in Vancouver and Burnaby)? Have you actually seriously discussed purchasing property with trusted friends, spouse or other relatives? Today it is certainly riskier than 20 years ago considering the mortgage values, but with a little more urban evolution even a $900K rowhouse can come with rental basement and main floor suites bringing in 2/3rds of your mortgage payment, therein breaking up the financial risk amongst more people and putting third party money to good use. Many retired parents are building lane houses for the adult married kids who make the mortgage payments in the form of rent (you cannot subdivide a lane house from the main property) that are not too far above typical two bed + den condos. The parents can use the main house as collateral for financing. Single working adult kids could still, on average, make at least half the mortgage payments. The idea is that the parents will eventually move into the lane house and the kids and grandkids take over the main house as they approach middle age.

        This is all to say that with imagination and very careful risk taking and deep, deep planning, much can still be accomplished even with today’s affordability challenges.

        1. MB writes: “I believe that wealthy foreigners buying up condos and detached luxury homes would explain only a part of the price rise, but there does seem to be an overreaction building to legislate against them.”

          One of the things I note about the public conversation on all this is that it’s only being viewed through the lens of real estate and affordability. Moving wealth out of China (we might want to ask why that is happening & whether we should be worried about it too) and moving it to Canada has an effect – whether big or small or in-between – on housing prices. But what are it’s other effects on the Canadian economy? Are they positive or negative or both? And, and I think this is a crucial question, what will happen to that wealth when the next generation, who will likely have grown up in Canada, takes control of it?

  5. Thomas – Totally disagree; these numbers of 4-5 million are pie in the sky. The reality is Canadians aren’t moving here in large numbers because the economic prospects and cost of living are not favourable. From 2006-2011 Vancouver was in the middle of the pack in percentage growth (9.3%) compared to Calgary (12.6%) Edm (12.1%) Sask (11.4%) Moncton (9.7%) Toronto (9.2%) Ottawa (9.1%). The Chinese may be buying up all the houses but that does not mean they can just move here, we still have immigration policies. True story: my Chinese coworker said 3 friends moved to Vancouver from China and they couldn’t stand the weather in the winter and moved back. Not sure why people think this place is Los Angeles before they move here but upon arrival the awful rainsoaked winters bring out the return tickets or sunlamps if they can’t leave. So I think those numbers are rubbish.

    1. As I said above: reflect on your worldview. It is incorrect. Repeating it doesn’t make it any more accurate.

      Vancouver has gorgeous weather, little rain in W-Van, Surrey, Richmond, Van-West even in winter and with global warming upon us Canada, incl. Vancouver, is one of the many beneficiaries of this worldwide trend (whether human caused or not is irrelevant in that context)

      1. Wow. Little rain, are you high dude? Your “Repeating it doesn’t make it any more accurate.” statement is rich coming from person who repeats over and over again the need to build tunnels to move traffic through the city (Granville Street) and your famous subway along Hastings to Burnaby, over to Belcarra, over to North van along Marine Drive, over to Bowen Island, then back to Downtown.

    2. Ron, you’re overlooking the fact that cities like Calgary, Edmonton, Moncton, possibly Ottawa, all have loads of undervalued farm land to gobble up with subdivisions. Metro Vancouver has a little more than 820 km2 that is constrained by mountains, the ALR and the sea.

      Demographic growth has a different meaning here which is complicated by speculation. Ergo sky high prices.

  6. When housing is treated as a speculative investment then there is no point in discussing affordability because it will be all about profit and not about a place to call home.

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