Real Estate

Vancouver housing bubble?

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  • Aug 13th, 2018 7:37 pm
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Jan 14, 2009
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Vancouver, BC
Motoss wrote:
Feb 11th, 2018 9:41 pm
Source ?
USSR
China under Mao (contrast with market oriented modern China that embraced trade)
East Germany
North Korea
Vietnam
Venezuela
India
Cambodia
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Dec 27, 2006
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zakarydoks wrote:
Feb 11th, 2018 9:51 pm
USSR
China under Mao (contrast with market oriented modern China that embraced trade)
East Germany
North Korea
Vietnam
Venezuela
India
Cambodia
I think you are confused - source that the author of that article is a communist?
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Jul 29, 2003
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zakarydoks wrote:
Feb 11th, 2018 9:34 pm
I don't need research because it is a widely accepted economic principal. Prices increase when demand outstrips supply. Don't listen to communists, they will lead you to a dark unhappy place. Revel in the fact you live in a city so beautiful that people all over the world wants to own a home here. I want to keep it that way. You should thank me.
Here's the article. The researcher isn't sponsored and admits he would gain from the current market conditions.
The Globe and Mail

Academic takes on Vancouver’s housing-supply ‘myth’

DARRYL DYCK/THE GLOBE AND MAIL
KERRY GOLD
SPECIAL TO THE GLOBE AND MAIL
PUBLISHED NOVEMBER 17, 2017
UPDATED NOVEMBER 17, 2017

In Vancouver, the detached house owner is often vilified. So too, is the resident who protests density.

They are vilified by what one academic is calling "the housing supply myth," which is the belief that we need more housing in order to lower costs. It's an argument commonly used by politicians, industry, and some academics and citizen activists.

"There is an intuitive appeal to that argument," says Dr. John Rose, who spent the last year on education leave, researching the popular belief that Vancouver has a lack of housing supply. "We understand this idea of supply and demand, intuitively, even if you haven't taken an economics course."

However, he has concluded that Vancouver does not have a shortage of housing units. In fact, we have a surplus. And, as anybody in Metro Vancouver knows, prices have not plummeted as a result.

"If we are looking back at the last 15 to 20 years, we have been providing more than enough units of housing – and it's still unaffordable.

"And yet, you see this argument being thrown out there by various quarters, that we have this housing shortage."

Dr. Rose is an instructor in the department of geography and environment at Kwantlen Polytechnic University. He's been teaching there since 2002. He calls his report The Housing Supply Myth, based on data from the Statistics Canada censuses and the Demographia Survey House Price Data. He also looked at supply in housing markets elsewhere in Canada, the United States and Australia.

"As a resident of Metro Vancouver and observing all this construction around me, I thought: 'How do we have a housing shortage?' Maybe I'm missing something, but this doesn't seem to stick. And this data supports that idea."

In order to ensure his findings weren't just a blip, Dr. Rose went back to the 2001 census, covering a 15-year span. He found that for each household added during this period, the region added 1.19 net units of housing. Put another way, for every 100 households that came along, Metro Vancouver added 119 net units of housing. According to census data, there are also 66,719 unoccupied dwellings in Metro Vancouver.

And despite a surplus of housing stock, affordability has significantly worsened – a contradiction to the supply mantra.

"It's quite the surplus," he says. "I should also note that Vancouver's ratio was the fifth highest of all 33 census metropolitan areas examined during this period – at the same time as its housing prices escalated far beyond the other markets.

"We would think that if a market got less affordable, maybe that meant supply was getting tighter and tighter. But that's baloney. That's garbage," he says. "So my answer to the supply argument is that it's tenuous for all the markets, because you can basically see no relationship – and this is over a 15-year period.

"Here we've had more than enough supply and yet the housing costs have gone crazy."

It's important that people understand the true nature of the affordability problem so we can take significant action to correct it, says Dr. Rose. He favours taxes on speculation, and doesn't rule out a ban on foreign buying of existing properties, as New Zealand is implementing next year. He also questions the building of housing units that are overpriced and intended for speculation, and therefore "pointless."

And he's not a man without "skin in the game."

"I am doing research that would, if acted upon, significantly degrade the value of my property, and I think to myself, 'if I sell it now maybe I could retire earlier.' So the self-interested side of me would say, 'don't interrupt the party.' The good side says, 'no, for this situation to get reined in, something more dramatic is necessary.'"

The supply argument also targets residents who are more community-minded than concerned with housing units. Whether it's people trying to fight density in Chinatown, Marpole or Grandview-Woodland, they're routinely painted as selfish NIMBYs who are to blame for high prices.

Josh Gordon, assistant professor at Simon Fraser University's School of Public Policy, has regularly spoken out against the more-supply argument.

"There's simply no evidence of a slowdown in construction or supply," says Dr. Gordon. "The construction industry in Vancouver is operating at full throttle. There are around 40,000 units under construction, which is twice the historical average for the post-2000 period. The idea that we should get more supply into the pipeline is a bit silly.

"The role of the supply argument is, to a large extent, to distract the public and policy makers from action on the demand side, specifically in terms of foreign capital."

Dr. Rose says the pro-supply camps tend to be divided into those who blame land use constraints, such as the Agricultural Land Reserve (ALR), as limiting outward expansion, and those that argue for upward density, such as towers. Both camps blame government regulations on stifling development and consequently standing in the way of affordable housing.

Demographia, which puts out the Housing Affordability Survey of cities each year, attributes high prices to constraints such as the ALR. In the other camp is industry spokesman and condo marketer Bob Rennie, who has said: "If you have a 'no tower' sign on your front lawn, you have no right to speak to your children about affordability … We can't have low density and low prices … We just don't have the supply."

"What they're implicating is citizen resistance," says Dr. Rose. "Bob Rennie is very aware he's advancing an argument that benefits him economically. He acknowledges that. But it's interesting that it's an argument picked up by generally well-meaning academics that support the idea of smart growth. I'm sympathetic to that, too. But I'm leery of attributing our high housing costs and the escalation we've seen over the last 15 years to an inadequate densification."

University of B.C. sociology professor, Dr. Nathanael Lauster, who wrote the book, The Death and Life of the Single-Family House, advocates for greater density. He sees the single-family house as an oppressive housing type designed to exclude low-income people.

"I think both demand and supply policies, all these things are working together. But I do think insofar as we have a lot of land locked up, reserved only for millionaires, I think expanding into that land, and enabling more diverse housing options would enable more affordability."

There are supplyists who are notoriously confrontational, particularly on social media, and Dr. Rose knows that his findings will be challenged.

"Bring it," he says. "Here's the data. If you want to argue against it, go ahead. It's publicly available. And when I did this research, I had my independence. Nobody owns this. I get no sponsorship from any industry, any sector. I'm a free agent.

"I think that's a benefit of this research. It's not coming from a school of business that is being funded by the real estate industry, or somebody who's passionate about densification and smart growth. I think there's some romanticizing going on, about what the ideal city should look like, and unfortunately it gets sucked into this debate about affordability.

"I'm just saying look at the numbers, and we see Vancouver has plenty of supply.

"And can we build ourselves out of this? Not in this current model."
R.I.P. Rick Rypien #37

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Deal Addict
Jan 14, 2009
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Motoss wrote:
Feb 11th, 2018 9:44 pm
Good to know - so you just made it up and I’m going to believe you?? Get back to me when you have a legitimate source, otherwise you are just a time time waster.
I'm trying to engage with you in good faith but I'm not getting the same from you. If you don't believe that many Vancouver residents from Asia prefer to work in Asia due to better opportunities then we are too far apart to have a good discussion. I gave you a source that showed 300,000 Canadians are living in HK and you say I made it up. I'm not looking for a fight so I agree let's not waste each other's time.
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Haz wrote:
Feb 11th, 2018 9:54 pm
Here's the article. The researcher isn't sponsored and admits he would gain from the current market conditions.
Thanks for posting - he knows about it but refuses to acknowledge it.
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Jan 14, 2009
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Motoss wrote:
Feb 11th, 2018 9:53 pm
I think you are confused - source that the author of that article is a communist?
I think he is a communist because he sounds like a communist.
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Dec 27, 2006
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zakarydoks wrote:
Feb 11th, 2018 10:00 pm
I think he is a communist because he sounds like a communist.
Sorry you feel that way - sucks for you to be the minority.
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Jan 14, 2009
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Haz wrote:
Feb 11th, 2018 9:54 pm
Here's the article. The researcher isn't sponsored and admits he would gain from the current market conditions.
Thanks. I read the article before and it can be summed up by "we built a lot of units therefore it is not a supply issue" which is not an economically sound argument. You cannot jump from we built a lot of units to there is no supply issue. Supply is relative to demand and it is very difficult to identify "true demand". Markets are forward looking, supply tries to match future demand. Just like fair market value, if one can accurately identify and predict "true market demand", they would be billionaires. This is all very basic undergrad econ and finance.
"Bring it," he says. "Here's the data. If you want to argue against it, go ahead. It's publicly available. And when I did this research, I had my independence. Nobody owns this. I get no sponsorship from any industry, any sector. I'm a free agent.

"I think that's a benefit of this research. It's not coming from a school of business that is being funded by the real estate industry
Sounds like a classic communist insinuating conflict of interest in business schools. It is scary that someone who teaches at a college would venture so far away from his field of competence yet be so confident and combative. Classic Dunning-Kruger effect.
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Jan 14, 2009
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Motoss wrote:
Feb 11th, 2018 10:06 pm
Sorry you feel that way - sucks for you to be the minority.
Source? Smiling Face With Open Mouth
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Dec 27, 2006
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zakarydoks wrote:
Feb 11th, 2018 10:28 pm
Source? Smiling Face With Open Mouth
Comment section in the article will back up the author.
Deal Addict
Jan 14, 2009
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Motoss wrote:
Feb 11th, 2018 10:34 pm
Comment section in the article will back up the author.
Comments section is a source? Where did you go to school? Smiling Face With Open Mouth
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Dec 27, 2006
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zakarydoks wrote:
Feb 11th, 2018 10:35 pm
Comments section is a source? Where did you go to school? Smiling Face With Open Mouth
Clearly not the school you went too - sucks for you to be the minority. All your ideas have been debunked above and on the past 10-15 pages. Any other questions?
Deal Addict
Jan 14, 2009
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Motoss wrote:
Feb 11th, 2018 10:44 pm
Clearly not the school you went too - sucks for you to be the minority. All your ideas have been debunked above and on the past 10-15 pages. Any other questions?
Clearly not lol!! No way we had the same education. That would be all. I'm here to clarify misinformation not fight. Good luck to you in the real estate market. Smiling Face With Open Mouth
Last edited by zakarydoks on Feb 11th, 2018 10:50 pm, edited 1 time in total.
Deal Addict
Dec 27, 2006
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zakarydoks wrote:
Feb 11th, 2018 10:50 pm
That would be all. I'm here to clarify misinformation not fight. Good luck to you in the real estate market. Smiling Face With Open Mouth
I’m glad you learned and got tought a lesson - you are welcome. I look forward to hearing what the NDP has to say in late February- good luck in the real estate market Winking Face
Deal Addict
Jan 14, 2009
1601 posts
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Vancouver, BC
Motoss wrote:
Feb 11th, 2018 10:53 pm
I’m glad you learned and got tought a lesson - you are welcome. I look forward to hearing what the NDP has to say in late February- good luck in the real estate market Winking Face
I didn't learn anything useful except maybe how lefties think. I guess I learned something about social justice but again it's not anything useful but sometimes entertaining Face With Tears Of Joy.

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