VANCOUVER—Real estate experts from around the world are talking about the next steps for Vancouver, Canada, as it begins a process to get more people into the housing market.
The city has a shortage of homes, but they are becoming increasingly expensive.
That is a problem for many, especially young people who are leaving the city and choosing to live in the country.
The shortage of affordable homes is putting off potential buyers and renters who need to find somewhere to live, said Dan Loughman, the president of the real estate consulting firm Loughmans Real Estate Group.
He says the average price for a home in the city rose 5.5% in July, but it was just 2.7% in the past three months.
The pace of house price growth in Vancouver slowed to 5.2% in June, but the pace of home price growth has risen to 12% in May.
And the trend is likely to pick up in the coming months.
Homeownership rates in Vancouver are up 6 percentage points since April, but their share of the city’s population has fallen to 37% from 42% in 2015.
And homeownership is still below 30%.
Loughmans said it’s too soon to tell if the slow pace of housing construction will be a drag on Vancouver’s economy.
The biggest challenge is not supply, but affordability.
“The housing affordability issue is the real challenge,” he said.
“It’s not just the shortage of housing, it’s also the affordability issue.”
The average price of a home is a key factor in determining whether people buy or rent.
That number varies depending on how much you earn, but Loughmann said that for young people, the higher the rent, the lower the average.
That could be a problem because a $300,000 house would cost a homeowner $200,000 in rent.
But Loughmore says it is not a bad thing if renters are willing to pay more for the same home, since they will have more time to work.
“Rents are the biggest issue,” he explained.
“There is a long time horizon for renting, so it is a big concern for young workers, especially if the market conditions deteriorate.”
Loughmas says the rental market has been particularly volatile over the past few years.
Home prices have been falling for a while, but have recently accelerated again.
There is some evidence that the price appreciation may be slowing, as the market adjusts to a low supply.
And that means it is likely that rental prices will be higher again in coming months, but not to the same level as they were in 2015 or 2016.
The average cost of a single-family home in Metro Vancouver is $1.2 million, but that figure is expected to increase by 5% in coming years.
According to a recent report by real estate website Zillow, the median sale price in Metro has increased from $1 million in 2015 to $2.8 million in 2020.
And prices are still lower than they were 10 years ago.
But the median income of Metro’s population is still more than $70,000 a year less than the national median income.
And there are some signs that affordability is improving.
Home sales increased by nearly 30% in 2017, and are expected to grow by another 4% in 2018.
The national average price rose 5% last year, but Vancouver is just a few years behind in that.
“We’re not where we need to be yet,” Loughmon said.
And he thinks that is going to change in the next few years as the city builds more affordable housing.
But there are still plenty of questions.
Why aren’t more people getting into the market?
Are they coming from more expensive areas or are they coming because of a shortage?
Loughmen says that people are looking for more affordable options than ever.
“If we can get more affordable, it makes sense,” he says.
And as the economy continues to recover, it could boost the number of people moving into the city.
But if the economy worsens and demand for housing goes down, Vancouver will need more rental housing to make up for the loss.