News: Vancouver Real Estate Market

Bob Rennie at UDI - a closer look at why Vancouver is different by Susan M Boyce for the Metro Vancouver Condo Guide

Bob Rennie's address to the Urban Development Institute (UDI). As always, information-packed statistics came thick and fast, often generating a collective gasp of amazement. This year, Rennie focused on a question that's long been part of ongoing debate around dinner tables and office water coolers : is Vancouver the best place to live as The Economist and other publications suggest? Or are we the least affordable place to live as reported by the Frontier Centre for Public Policy in Winnipeg who ranked Vancouver 323rd out of 325 cities worldwide?
Fining answers was a voyage into the mire of public perception and often unsubstantiated hype.

Differing Economic Drivers

As he has in the past, Rennie stressed the importance of differentiating between residential markets driven by the local economy and those driven by external forces such as off shore investment. He believes areas like the Westside and Coal Harbour that are not reliant on local incomes should be taken out of the mix when considering Vancouver's overall affordability factor - and he had numbers to back up his reasoning. "Last year, I said 60% of the homes that sold on the Westside for over $2.5 million were sold to Mainland China. This year I'm revising that figure to 85% of home sales over $2 millions."

The information tap had been turned on. "If you look at the top 20% of the 21,500 condominium homes that were sold in Vancouver in 2010, the highest registered sale was $17,571,000, and the average price of those 4,300 homes in the upper quintile was $909,000." Rennie said. "But the bottom 80%, approximately 17,000 homes had an average selling price of $313,000. We don't deserve to be labelled the "least affordable", because the 4,300 sales have nothing to do with local income." He believes if the top fifth of sales were excluded, Vancouver would have ranking closer to 160 on the Frontier Centre's affordability scale.

Even more starting to many was the impact such skewed numbers have on a national basis. "Something is definitely happening here [in Vancouver]", Rennie noted. "It's been reported that Canadian housing prices rose by 8.9% last year. But if you take the Lower Mainland out of the equation, that figure drops to 4.3%. There are some real irregularities at the top of our market."

Rather than simply argue against the prevalent concept that much of Vancouver's upper-end condo market is owned by non-Canadians, Rennie chose a simple, yet dramatic visual. First, he challenged his audience to guess how many of the 21,500 condos sold in 2010 had property taxes sent outside Canada and write that number down. "Now indulge me, and everyone stand up." The crowed rose to its feet, albeit with a few minor grumblings interspersed with the curiosity factor.

"If the number you wrote was more than 1,000, sit down". Virtually the entire room sat. "If you said more than 500, sit down". The number of people left standing could likely have been counted on the fingers of two hands. "Did anyone say 159? That's 27% to save you doing the math." Throughout the room, people who didn't actually gasp shook their heads in astonishment.

For single-family homes, Rennie said the numbers are even more dramatic - only 0.09% of these residential property assessments are sent abroad. "Even if you multiply these numbers by 20 or 30 per cent. I don't believe they match the negative media buzz. These people are clearly doing business here, living here, and contributing to the economy here."

New View of Development Zoning

Looking ahead, Rennie sees density continuing its rise in public awareness and popularity. "Density and rezoning are no longer just downtown issues", he noted, adding social media is helping fuel the movement toward local involvement in the design process. "Developers will need to get used to a much lengthier community engagement process when building or applying for rezoning. If you're not reaching out to neighbourhood for their buy in, you won't get political support".

Always a supporter of high-density living, Rennie was clear that while there's huge demand for new, increased-density housing located close to transportation, it's far from a one-side-fits-all solution. "I'm a fan of the Marine and Cambie development plan, but it's important to understand that what works at Cambie and Marine won't necessarily work at Cambie and 25th. And what the people living at Cambie and 25th will fight for, likely has no relevance at Marine and Cambie."

The Best Place on Earth

Rennie was open and adamant when it came to refuting reports suggesting Vancouver is more expensive than London or New York. "We're not. The power of home buying dollars outside areas like the Westside is breathtaking. And people like Vancouver - they want to move here and be part of the city I adore so much."


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