Our Vice President of Intelligence, Andrew Ramlo recently presented at UDI Pacific Region's sold-out luncheon. His presentation, "Looking Beyond the Headlines and Charting the Way Forward," explored the why behind recent changes in the housing market, and the factors that should be considered in regard to the future of the region's real estate market.
Key highlightsÂ
• "Millennials are fleeing the city of Vancouver" is a myth - the city of Vancouver has, and will likely always have, an influx of under-35s due to the composition of its dwelling stock. This matters because the region's suburbs have, and will likely continue to have, an outflow of under-35s as kids eventually move out of the house. Understanding this process is important as Canada's millennial generation will soon be its largest, and they are now entering the household formation stage of lifecycle.
• #DontNeed1Million - 74% of sales in the Lower Mainland fell below the one million mark in 2018, while 61% of sales in the city of Vancouver fell below the one million mark in 2018. Only 0.9% of detached sales in the city of Vancouver fell below the one million mark but 43% of detached sales in the region were below one million in 2018.
• On affordability - we need to do a better job at defining what it is and metrics used to track it; we need to stop comparing average/median incomes to average/median sales prices.
• Since the great recession of 2009, we have experienced one of the most significant periods of economic expansion in Canadian history. However, headwinds of change are evident through slower consumer spending, a normalizing housing market, slowing job growth, a depressed energy sector, international trade wars (US), and political tensions (Canada/China, BC/Alberta, federal, municipal, Brexit).
• If expected levels of immigration are achieved nationally and regionally, current levels of housing starts will see the supply of new homes coming to the market fall below expected demand. In the short term, this has the potential to lead to upward pressure on housing prices and/or further constrain patterns of household formation.Â
• On affordability - we need to do a better job at defining what it is and metrics used to track it; we need to stop comparing average/median incomes to average/median sales prices.
• Since the great recession of 2009, we have experienced one of the most significant periods of economic expansion in Canadian history. However, headwinds of change are evident through slower consumer spending, a normalizing housing market, slowing job growth, a depressed energy sector, international trade wars (US), and political tensions (Canada/China, BC/Alberta, federal, municipal, Brexit).
• If expected levels of immigration are achieved nationally and regionally, current levels of housing starts will see the supply of new homes coming to the market fall below expected demand. In the short term, this has the potential to lead to upward pressure on housing prices and/or further constrain patterns of household formation.Â
• If we continue to squeeze household formation for new home entrants, the region would need to add roughly 100,000 net new homes to accomodate demands from those entering the market over the next decade.
View the entirety of Andrew's presentation, Looking Beyond the Headlines and Charting the Way Forward.Â
Our rennie intelligence division empowers individuals, organizations, and institutions with data-driven market insight and analysis. Experts in urban land economics, community planning, shifting demographics, and real estate trends, their strategic research supports a comprehensive advisory service offering and forms the basis of frequent reports and public presentations. Their thoughtful and objective approach truly embodies the core values of rennie.
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