Photo by Michael Geller, Vancouver Courier

Truth or clickbait: Is the housing crisis in Vancouver really over? Nope, not for the many people it has negatively impacted, and will continue to do so.

It took some time to get to this crisis, but it may not take as long to get out. Maybe it already has. Demand-side parameters — taxes, interest rates, mortgage requirements, investment sources, prices,  expectations, attitudes, politics — are all shifting simultaneously. That means, on the supply side, the implications of this chart are profound:

Past 12-month Starts, Completion (CMHC), and Annual Household Formation – Metro Vancouver 1990-2018

Housing starts and completions have never been higher over the last 28 years. And household formations have dropped.

Combined with all those other changing parameters, I think it’s safe to say that the housing crisis as we knew it is already over.  Civic candidates are basing their platforms and arguments on the circumstances of the past, proposing changes to alter conditions that have already changed or are in the process of doing so, perhaps dramatically.

But I could be wrong.

Comments

  1. Saying the housing crisis is over is the same as asking if the 9.0 earthquake we all went through is over. Yes, the shaking may be over, but the damage will take a long time to fix.

  2. If government actions lead to more rental stock I’m okay with overshoot in policy. Canada was far too lax in ensuring rental construction continued after the boom of the Fifties-Seventies. The fact that we’re still allowing rental to be torn down for condos is unconscionable.

    1. When renters buy a condo they move out of their rental unit & make room for someone else. — Metro s housing supply needs to increase faster than population growth. IF not both rental & ownership costs will become more un affordable

      1. Why is the “logical” step to go from renting to owning a condo? Studies have shown time and again renting usually makes more financial sense. This will be driven home even more now that the bubble has popped and Joe Schmoe isn’t able to flip his condo for a quick buck. Canadians needs to get away from this idea that renting is somehow second rate.

        1. I agree it does make more sense to rent . I would not buy a condo in this market. –Buying a condo is what a lot of renters do. When they do they move out of their rental unit.–Bottom line is there needs to be a surplus of housing units to keep occupancy costs in check

  3. There are many factors involved in calculating household formation including poverty levels, pay rates, job opportunities, unemployment rates, birth rates, aging population, cost of higher education, divorce rate, death rate, marriage attitudes, family break-ups, cost of shelter, cost of living, etc. etc. etc. I do not think that anything can be concluded by comparing housing starts to the very complex calculation of household formation.

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