Vancouver real estate: Mansion sold for $42M, well below the asking price but still a record high

Kendra Mangione
other

 VANCOUVER — A Vancouver mansion sold this month for what realtors described as a record-breaking price was purchased well below what its owners were asking.

Representatives of Sotheby’s International Realty said last week the mansion known as the Belmont Estate sold for what was the highest price ever in the region for a single-family detached home on a single lot.

But the company refused to provide any details of the sale to CTV News, citing the privacy of both seller and buyer.

Sotheby’s would only say that it sold for more than the previous record of $31.1 million, and a public listing showed the asking price of $58 million. This was down from when then-owners Joseph and Rosalie Segal tried to sell the home for $63 million several years earlier.

Sotheby’s would not say whether the home sold at, above or below listing, nor would the company say whether it was for sale under the same owners.

According to documents through BC Assessment, the mansion was sold on July 9 – a cash sale for $42 million.

Documents show that, prior to this sale, it had been bought for about $7.1 million in 2009, suggesting the owners who previously tried to sell the mansion at $63 million in 2017 were the same as the owners who accepted the much lower $42 million this month.

The five-bedroom, 12-bathroom estate was also listed in 2020 for $58 million, but the listing was pulled down. Records suggest it did not sell at that time.

Sotheby’s Christa Frosch would not provide many details on the buyer or buyer of the 21,977-square-foot home except to say that they are Canadian.

Records show the home was purchased by a company incorporated earlier this year under the name 1307876 B.C. Ltd. The company’s director is Peter Chung, a doctor who is CEO of Primacorp Ventures.

That company describes Chung as an “entrepreneur, philanthropist, and diplomat…with businesses in education, real estate, health care and social enterprise.”

Frosch did not answer questions from CTV News about how long it typically takes to sell a house in this price category, saying only that it involves finding the right buyer, and that sometimes that means a house stays on the market longer than something more affordable to the general public.

The estate in Vancouver’s Point Grey neighbourhood is 20 years old, according to the listing, and took more than five years to build.

Among its features are a stone waterfall, elevator, wine cellar, ocean and mountain views, indoor pool, library and six parking spaces.

See more photos and read more about the estate at 4743 Belmont Ave. in last week’s coverage.

 

 

© 2021  All rights reserved.

Condo surveillance went too far, says privacy watchdog

Jeremy Hainsworth
Western Investor

Hidden cameras, tracking key fobs, sharing private video data on strata owners and guests represent excessive use of surveillance, report says

 Yaletown strata complex has 28 surveillance cameras and 30 fob access points. |File photo

Hidden cameras, tracking key fobs, sharing private video data on strata owners and guests represent excessive use of surveillance, report says

B.C.’s privacy commissioner has told a Vancouver strata corporation to stop using security surveillance system data for purposes other than which it was collected.

And, the strata was told, some data collected through its door key fob system was inappropriate.

“I find the degree of intrusiveness is high since the cameras run 24 hours a day, 7 days a week, wrote Lisa Siew, an Office of the Information and Privacy Commissioner adjudicator, in a June 29 decision. “The continuous collection of this information can have personal and social effects on individuals while they are under surveillance.”

Siew approved collection and use of personal information for enforcement of garbage disposal bylaws, for prevention and investigation of property damage in the parkade area and to create and update a key-fob inventory.

Apart from those points, Siew told the strata to stop collecting and using personal information through its video surveillance system, to stop collecting and using personal information through its key fob monitoring system and recommended the strata provide owners and residents with a complete list of all the video camera locations.

A resident complained the Yaletown strata had violated the Personal Information Protection Act (PIPA) by inappropriately collecting, using and disclosing personal information obtained through the systems. 

The complainant also alleged the strata was not adequately protecting the personal information.

The complainant alleged the strata “recklessly released the personal information including contact information and signatures of all lot owners without consent when including the list of people who attended an AGM.”

In response, the strata accused the resident of capturing the personal information of other individuals without consent by providing a photo of a computer screen allegedly showed “FOB use in real time.”

Siew stressed PIPA doesn’t explicitly prohibit the use of video surveillance by strata corporations, but because of their “arbitrary invasiveness,” such systems should only be used after less privacy-intrusive measures have failed to address a serious problem.

First, Siew said providing evidence to the commissioner of the issue under discussion was appropriate.

The strata corporation consists of 176 strata lots, including townhouses, divided between two complexes. The surveillance camera and key fob systems were updated in 2015. There are 28 cameras inside and outside and 30 fob access points.

The strata had investigated the resident for a rule violation. During that investigation, video surveillance footage of the complainant and his guests was allegedly shared with others.

He further alleged strata council members and others were viewing video surveillance footage of individuals in the hot tub.

He said he was actively monitored in real time and that the strata wanted to use cameras to monitor traffic in the garage and to catch people discarding cigarette butts.

“The organization appears to be collecting personal information from cameras hidden throughout the interior and exterior of the building and it uses personal information for undisclosed reasons,” the decision said.  

Further, it said, the strata introduced a rule to deny elevator access, and thus unit access, to residents who violated the strata’s rules and bylaws. 

The complainant explained the rule is implemented by “using the key-fob database information to deny access to the elevators by deactivating people’s key fob.”

Siew found the fob system collected personal information “clearly about identifiable individuals” and stored it in a database.

“It would clearly be a simple matter for the organization to use video surveillance footage, the concierge’s observations or eyewitness accounts to determine the identity of the person using a key fob at a specific location, date and time,” Siew wrote.

Further, she said, any visitors to the strata complex such as guests of owners or residents, couriers, delivery drivers or tradespeople will be affected by the organization’s collection of personal information.

And, she said, while some of the notification signs in the building about surveillance were sufficient, she said the strata bylaw about data collection was insufficient.

 

© 2021 Western Investor

New Westminster strata windup and sale finds solution in a bumpy market

Joanne Lee-Young
The Vancouver Sun

Just as strata owners at Kinnaird Place decided to sell their building because they couldn’t afford to take on major repairs, the market cooled, developers disappeared, the building’s land value slumped and a burst water main flooded units.

Former unit owner Mario Mameli stands outside Kinnaird Place at 65 First St. in New Westminster. Photo by Mike Bell /PNG

Kinnaird Place, an older residential building near New Westminster‘s downtown with 61 units recently sold for $22.7 million. The years-long saga leading to its strata winding up and sale of its building should be noted by anyone in units with major deficiencies to fix amidst rising costs and a volatile real estate market.

“That was a roller-coaster,” said Crystal Hunt, who bought her unit in 2015. “Things fluctuated so much, up and down, up and down.”

About a third of the owners were, like Hunt, first-time homebuyers with young families, getting into a rising market. Another third were owners who had been there for decades, dating back to when the building was built in 1984, with many on low and fixed incomes. The last group were renters, with the bulk paying grand-fathered, more affordable rates.

“There weren’t many who wanted to sell,” said Hunt, citing the building’s prime location in between the Pattullo and Alex Fraser bridges, with views of Mount Baker and overlooking the Fraser River, near downtown New Westminster, a park and transit.

But around 2016, it became apparent that the building needed some significant repairs and upgrades in the millions of dollars. The calculations were starting in the steep ballpark of a special levy of $80,000 for each unit, said Hunt.

“Is it reasonable to ask a 75-year-old woman (in this building) to cough up a hundred grand for a special levy?” said Gianmario Mameli, another owner, who bought his unit in 2016.

“Often, it’s a developer coming to the building,” said Hunt. “Ours was the other way around. We were trying to get ahead of things.”

“The strata council realized, ‘We can’t get the money we need to do the minimal work. How are we going to get more money?’” said Matt Nugent, a real estate broker with Macdonald Commercial.

So the strata engaged Nugent and three other brokers at Macdonald in August 2017 to find a buyer.

But, in March 2018, the B.C. government announced a new speculation and vacancy tax and an increase in its foreign buyers tax just as Ottawa’s new stress test was making it harder to get mortgages. All this threw a quick chill on the market.

“In the first quarter of 2018, (presale condo) sales were amazing,” said Nugent. “And then, in the second quarter, sales just dropped completely.”

Two developers with contracts signed to buy the building abruptly dropped out of their deals.

Then, in March 2019, as developers evaporated and the building’s land value was slumping, a nearby city water main burst.

“I had a bunch of people knock on my door: ‘You know, water is pouring in,” said Mameli. “I go downstairs and there’s a foot of water. I’m in my house coat, trying to help people get their stuff out.”

Residents in about 14 units had to move out for months because of the damage. A few tried to list their units for sale on their own, “and get out faster,” said Mameli, but a group of owners also appealed to city council and staff for help, explaining their bind.

In the end, the city presented an agreement that facilitated Merchant House Capital, a Victoria-based asset management group, being interested in buying the property through the process of the strata ending. It made provisions for renters to continue with Merchant, and for owners to stay if they wish to rent for a period of time after a sale.

In return, Merchant got some nuanced concessions from the city for its future development plans, exempting it from having to exclusively build rental in perpetuity on the prime site, according to CEO David Fullbrook.

“The strata was going to be caught in this limbo for several years,” said New Westminster mayor Jonathan Cote. “The city saw an opportunity to keep the affordable rental housing going as opposed to have the building be vacant or torn down until it can be re-developed.”

The only thing left to get through was seeing the process through the pandemic lockdown, starting in March 2020. At first, the strata couldn’t meet in person to vote on dissolving. It took until September for the Kinnaird Place strata to become the first-ever strata to wind up online. More than the needed 80 per cent of owners agreed and, eventually, all came on board. At the end of March, the sale completed. [email protected]

Start your day with a roundup of B.C.-focused news and opinion delivered straight to your inbox at 7 a.m., Monday to Friday by subscribing to our Sunrise newsletter here.

© 2021 Vancouver Sun

Langley 5,040-square-foot industrial building sells for $2.3 million

Frontline Real Estate Services Inc.
Western Investor

The freestanding building, in the Aldergrove area, is zoned light-industrial and includes renovated office space

Frontline Real Estate Services Inc., Surrey, B.C., for Western Investor

Property type: Industrial building

Location: 3063 275A Street, Langley, B.C.

Property size: 5,040 square feet

Land size: 8,304 square feet

Zoning: MI-A (light industrial)

Sale price: $2.3 million

Date of sale: June 16, 2021

Brokerage: Frontline Real Estate Services Inc., Surrey, B.C.

Brokers: Todd Bohn and Brendan Hobbs

 

© 2021 Western Investor

Less than half-acre in Mission, B.C. fetches ask price of $762,500

London Pacific Property Agents Inc.
Western Investor

Potential residential development site near downtown Mission sold for more than double its assessed value.

London Pacific Property Agents Inc., Vancouver, for Western Investor

Property type: Land

Location: 32875-32891 View Avenue, Mission, B.C.

Land size: 20,310 square feet

Land size in acres: 0.46 acres

Zoning: MD465 (Multi-unit duplex)

BC Assessment Value (2021): $338,900

List price: $762,500

Sale price: $762,500

Date of sale: July 14, 2021

Brokerage: London Pacific Property Agents Inc., Vancouver.

Broker: Ari Gelmon

 

© 2021 Western Investor

Canada first-time buyers hit by new dilemma

Ephraim Vecina
other

The Canadian housing market’s bull run is proving increasingly costly for would-be buyers

In the current environment, many first-time buyers are wrestling with a troubling dilemma: go for mortgages that either permit them to borrow the funds needed for their down payment, or loans that provide cash back after the closing.

Sherry Corbitt, a broker based in Whitby, Toronto, said that her business is seeing more clients go for these unconventional loans, which bear a remarkable similarity to those seen in the United States just before the Great Financial Crisis of 2008.

However, Corbitt takes heart in the fundamental robustness of the Canadian housing market, which has so far defied all doomsaying predictions in its roughly 25-year run of buoyant conditions – including a 21% across-the-board price gain since the pandemic took hold, Bloomberg Economics reported.

“We’re never going to see what happened in the States,” Corbitt told Bloomberg. “It’s just not possible here.”

At the same time, the broker admitted that “a lot of first-time buyers are not ready,” with much of her transaction volume in the past year coming from former renters whose landlords have decided to sell their properties.

“‘Well if I have to be evicted, maybe now’s the time to buy,’” Corbitt quotes her clients as saying.

Read more: How did Canadians fare on mortgage payments during the pandemic?

The Bank of Canada is taking a more cautious tone, saying that consumers are taking on increasingly unsustainable debt loads.

“The initial equity stake – or down payment – is the most economically significant factor associated with future financial stress. Generally, a high loan-to-value ratio (a smaller equity share) increases the likelihood of falling behind on loan payments,” the central bank said in its latest Financial System Review.

“Previously introduced mortgage stress tests and higher interest rates had slowed the accumulation of household debt and improved the quality of mortgage borrowing leading into 2019,” the BoC added. “But since mid-2020 this trend has reversed. Some households have taken on significantly more mortgage debt, which is reflected in an increase in the share of new mortgages with high loan-to-income ratios.”

These trends are shaping up to be a potentially fatal risk to the market’s bull run.

“Key developments in the housing market – exceptionally strong demand relative to supply, rapidly rising prices, expectations becoming extrapolative – all point to growing imbalances compared with a year ago,” the bank’s report warned. “Increasing house prices relative to income contribute to rising leverage for homebuyers. Also, a misalignment of house prices in comparison to fundamentals can lead to a correction in prices in the future.”  

Copyright © 1996-2021 Key Media, Inc.

How will immigration impact the mortgage market as Canada opens up?

Fergal McAlinden
other

An industry president expects the effect to be steady rather than spectacular

In an otherwise flourishing mortgage market, the absence of one key demographic has been keenly noticed since the beginning of the COVID-19 pandemic: new immigrants, traditionally a significant contributor to mortgage demand in Canada.

The imposition of global travel restrictions, flight bans and border closures as the pandemic spread in late 2019 and early last year had a predictably stark impact on immigration levels. The number of new immigrants arriving into the country in 2020 plummeted to just 184,000 – some way off the government’s target of 341,000, and the lowest total since 1998.

In a clear recognition of the crucial role played by immigration in the Canadian economy, the federal government has announced plans to welcome over a million new immigrants to the country over the next three years: 401,000 this year, followed by 411,000 in 2022 and 421,000 in 2023.

Christine Xu (pictured top), president and owner of the MoneyBroker Canada brokerage, told Canadian Mortgage Professional that despite the strength of the mortgage market over the past year and a quarter, the adverse effect caused by lower levels of immigration was also apparent.

Read next: Navigating the Canadian mortgage market’s current challenges

“We can see the decrease of new immigrants, even students – it [has] a huge impact because the downtown condo market, for instance, is not that active,” she said. “Rental prices are decreasing, as there’s just not too many people working or studying downtown.”

With Prime Minister Justin Trudeau having indicated his intention to reopen the Canadian border to fully-vaccinated tourists and foreign travellers from the beginning of September (August 09 for US tourists and residents), hopes have risen that some degree of normality could be set to return in Canada’s immigration levels in the coming months.

Last month, Royal Bank of Canada (RBC) economist Robert Hogue told The Georgia Straight that immigration could even serve as a “safety net” in the coming years against the possibility of a housing bubble developing in Canada.

Still, while new citizens and permanent residents hold sizeable purchasing power in Canada’s housing and mortgage markets, Xu noted that it could take some time for many to decide that it’s safe to travel – particularly from China, where reported new COVID-19 cases have fallen substantially in recent months.

“Hopefully, in September, the borders will be more open than now, and [the current situation] will change,” Xu said. “I think it will not be as hot as the beginning of the year.

“The new immigrant is a huge buying force in the country, especially in larger cities like Toronto and Vancouver, but I’m dealing with the Chinese immigrant [community] and lots of them are not in a hurry to come back. Right now, China is the safest place in the world regarding the COVID situation.”

Read next: What will happen when Canada reopens?

One sometimes overlooked area where immigration could still have a big impact for the rest of the year is the commercial sphere. While non-resident speculation taxes in Ontario and British Columbia have proven controversial, and are sometimes viewed as an impediment to building and supply, similar levies don’t apply to commercial property, making that an attractive prospect for foreign investors.

“Lots of investors are thinking about the commercial market,” Xu said. “For investors, there’s no foreign buyer’s tax if they’re on the commercial side, so it’s getting very active.”

A pandemic-era development that Xu believes is likely to continue as Canada’s reopening gathers pace is the shift away from the city that’s seen many homebuyers gravitate towards areas outside the country’s urban centres, particularly Toronto and Vancouver.

“Lots of people would never have [considered] remote working, but they now know that it’s a possibility,” she said. “There are also people who just realize they don’t need to be downtown anymore; they’re outside the GTA, it’s cheaper and there’s a bigger space – so why not? I think the trend will continue.”

Copyright © 1996-2021 Key Media, Inc.

Toronto-based real estate startup Properly raises $44 million with plans to expand across country

Stefanie Marotta
other

The funding round for Properly — which allows buyers to purchase a new home before listing their current property on the market — was led by U.S.-based Bain Capital

“Despite the fact that home values have doubled in Canada and that the percentage of commission has stayed the same, the actual experience to buy and own a home hasn’t evolved at all,” Properly co-founder and CEO Anshul Ruparell said. Photo by Cole Burston/Bloomberg

Real estate technology startup Properly Inc. has raised $44 million to expand across Canada as it bids to disrupt an industry “largely focused on serving itself.”

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The funding round for Toronto-based company — which allows buyers to purchase a new home before listing their current property on the market — was led by California-based Bain Capital Ventures. Boosted by surging demand in Toronto’s heated housing market during the pandemic, the round values Properly at $220 million.

Intact Ventures, the venture arm of Toronto-based insurance provider Intact Insurance Company Ltd. and real estate technology provider FCT participated in the round, as well as individual investors including Wealthsimple co-founder and chief executive officer Mike Katchen, Softbank Vision Fund partner Lydia Jett, Zillow co-founder Spencer Rascoff and Opendoor co-founder and CEO Eric Wu.

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The Toronto housing market, in which Properly operates, saw a surge of activity during the pandemic as homeowners sought more space and raced to lock in low interest rates. The boom translated to more business for the company as buyers facing an intensely competitive market sought out new resources in an industry that has been reluctant to change even as prices have been on a decade-long tear, Properly co-founder and CEO Anshul Ruparell said in an interview.

“There’s been very little focus on changing the way that things have been done,” Ruparell said. “Despite the fact that home values have doubled in Canada and that the percentage of commission has stayed the same, the actual experience to buy and own a home hasn’t evolved at all.”

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As with most real estate brokers, Properly charges five per cent commission on the sale price of the property. In addition, it provides sellers with a purchase agreement based on the equity in their home. The homeowners then provide their mortgage broker with the agreement to secure financing to purchase their new home before selling the existing property.

Properly has 90 days to sell the home before it are required to buy it themselves. If it sells the home for a higher price than the sale agreement, it refunds the customer the difference.

The Canadian market is long overdue for new ways of purchasing real estate, Bain partner Merritt Hummer told the Financial Post.

“There’s an even greater need for a Properly in Canada than there is in the U.S.,” Hummer said. “When we think about things like home prices growing really quickly and getting out of reach for consumers, or how difficult and onerous it is to secure a mortgage … those are some of the pain points that we’ve thought about a lot in the U.S., but they’re felt by Canadians to an even greater extent.”

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Ruparell grew up with real estate aficionados. When his grandfather immigrated to Canada in the 70s, he got his real estate license. And his father, brother and cousin all work in the industry. But Ruparell launched his career in finance, working his way through investment banking and venture capital before building and selling a few of his own startups in the United States.

After watching startups offer new ways for people to shop for and purchase homes in the U.S., Ruparell set his sights on the real estate market in Canada.

He co-founded Properly in 2018 with chief technology officer Craig Dunk, who co-created BlackBerry Messenger at BlackBerry Limited (then known as Research in Motion), and chief operating officer Sheldon McCormick, who launched Uber Technologies Inc.’s UberX platform in Canada.

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Since then, Properly’s team has grown from three employees to 60, with plans to triple its staff in the next year. It also employs 30 real estate agents.

While Ruparell would not disclose the number of customers that use Properly, he said that its customer base has grown almost 100 per cent per quarter in the past year. He plans to use the funding to expand across Canada, starting with Vancouver and other cities in Ontario in the next 12 months, and invest in new technology that will provide customers with tools to help them navigate the home buying process from beginning to end.

The expansion comes as concerns mount that the real estate market is in a bubble and could burst — something that could leave Properly on the hook for properties it has already purchased. Hummer said the company will need to be diligent in assessing the properties it agrees to purchase.

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“The thing that a company like Properly has to get right is that they have to understand how to value homes,” Hummer said. “There’s only a risk if they overpay for a home and then can’t sell it, but they’re going to have to put controls in place to ensure that they’re paying fair prices for homes and that they’ll be able to sell it to the market at a comparable price at which they buy it.”

As the startup looks to grab market share from the traditional real estate brokerages that dominate the industry, Ruparell says that the greatest barrier Properly faces is convincing potential customers to trust its services and technology while they make one of the most expensive purchases of their lives.

“Buying a home is one of the most significant milestones that somebody goes through in their life, and in almost all cases it’s one of the biggest financial commitments that they’re making, so the stakes are high and the cost of getting things wrong are high,” he said. “It’s about ensuring that our customers recognize that they’re not leaving anything on the table when choosing to work with Properly over a traditional agent.”

© 2021 Financial Post

July home sales drop for fifth straight month

WI Staff
Western Investor

Early Vancouver data shows sales down 17 per cent from June but low inventory may keep prices firm, analysts say

“Tepid” price drop expected if current trends persist. | Glacier Media files

Early Vancouver data shows sales down 17 per cent from June but low inventory may keep prices firm, analysts say

Early July data shows that housing sales are down across Greater Vancouver for the fifth straight month, but a corresponding drop in new listings may keep price corrections in check.

“Where have all the sellers gone?,” asked Kevin Skipworth, a partner in Dexter and Associates Realty of Vancouver, in noting that active listings had dropped 27 per cent as of mid-July from the same point a month earlier.

As of July 15, 2,491 new listings had been added to Multiple Listing Service of the Real Estate Board of Greater Vancouver, as compared to 3,405 as of June 15 and 3,758  in mid-May.

Total housing sales as of mid-July tallied 1,692 transactions, down 17 per cent from the 2,042 properties at the same time in June and 2,182 as of mid-May.

The lack of listings could signal a return to the “ultra-competitive market” seen earlier this year, Skipworth noted, with multiple buyers presenting bids to secure a home.

If the current trend continues, “we could see total active listings drop below 10,000 to start September for only the second time in the last 25 years,” Skipworth said.

Other analysts say an expected bounce back in new listings and resistance to skyrocketing prices will keep house prices in check.

Noting that Greater Vancouver detached-house prices had hit an all-time high average of $1.9 million in June, Dane Eitel of Eitel Insights does not expect much of a price correction in the face of slower sales.

Eitel anticipates a “tepid 8 per cent to 10 per cent correction” of prices in the bellwether detached house market.

 “That implies values to peak around the $2 million barrier and then backtrack to $1.83 million, the previous market peak,” he said, which was seen in May 2021.

Eitel said that the trend over several years has been for active listing to reach their highest annual level in August and September, suggesting the greater supply would also dampen expectations of a further price hike in the autumn.

Both Skipworth and Steve Saretsky a Vancouver realtor who publishes the online Saretsky Report on the housing market, agreed that townhouses are now the most sought-after listing on the market.

“The townhouse market in Greater Vancouver is officially the strongest segment,” Starksy said. “With many people getting priced out of single -family homes, townhouses have become the next best thing. Inventory is incredibly tight at just 1.9 months of supply available. The typical townhouse has increased by $140,200 over the past 12 months.”

© 2021 Western Investor

Darlene Hyde and Dan Morrison: Governments in Canada need to work together to solve current housing crisis

Darlene Hyde
The Vancouver Sun

Opinion: The federal government needs to prioritize this issue and plan for a rapidly growing Canada. A hindrance is the tendency of all three levels of government to act independently. These divided perspectives must be resolved.

Housing prices in B.C. have skyrocketed over the past year, as demand surged into undersupplied markets — a pattern observed across Canada. Photo by Mark Blinch /REUTERS

The COVID-19 pandemic has made it clear that access to housing in this province and country is not where it needs to be. While solutions to our current housing supply crisis will undoubtedly come from widespread collaboration, the fix needs to start with government. A key question British Columbians as well as many others across the country are asking is if our three levels of government are doing enough when it comes to stabilizing the national housing market.

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The simple answer is no.

COVID-19 vaccine deployment across the country is a recent example of how governmental collaboration can effectively and powerfully respond to a crisis. We need that same type of collaborative approach to a strategy on housing supply that will make a true impact in municipalities across the nation.

Following months of a largely closed off Canada due to COVID-19, immigration to B.C. fell to its lowest point since 1989 and foreign investment into B.C. residential real estate declined to below one per cent of market volume. Yet, home prices continue to spike upwards, and demand remains high — especially here in B.C.

A major reason for the surge in demand is historically low interest rates. Adding to this, the COVID-19 remote-work structure has turned homes into a catch-all of offices, schools, gyms and living spaces; the desire and ability to move from the city to the suburbs has increased; and what better time to expand living space than when you’re at home 95 per cent of the time? Paired with this increased demand, housing inventory has been historically low, with many British Columbians hesitant to list their homes due in part to pandemic-related concerns. For example, the number of listings in the interior and on Vancouver Island are 50 to 60 per cent lower than needed for a balanced market in the long-term.

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As a result, housing prices in B.C. have skyrocketed over the past year, as demand surged into undersupplied markets; a pattern observed across Canada. While the most recent provincial sales statistics show market conditions are beginning to cool in many regions across B.C., this will not address the underlying cause of high prices, nor is it reason enough for governments to delay significant meaningful action on supply. If action isn’t taken, the next time the stars align for a hot market, we will find ourselves in a similar situation unless we act now.

In these market conditions, there is a tendency for action to take the shape of quick fixes. But simple solutions for complex problems don’t work. Adding more and varied housing options to meet the demand will make a major difference, and it will require significant long-term collaboration between all levels of government and the private sector.

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The B.C. government has allocated $2 billion in development financing through their HousingHub program to finance the construction of thousands of new homes for middle-income families. And to its credit, the federal government budgeted $2.5 billion, and reallocated an additional $1.3 billion to speed up the construction, repair, or support of 35,000 affordable housing units across the country. This will benefit young people and low-income Canadians, but it’s not nearly aggressive enough to address the overall shortage in housing supply.

There simply are not enough housing options available. We need a significant and sustained boost in housing stock to accommodate current and future demand. This has become a very visible crisis in B.C. Unless effective mechanisms are put in place to create the needed supply, affordability will continue to deteriorate.

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The federal government needs to prioritize this issue and provide a renewed national vision and housing strategy to adequately plan for a rapidly growing Canada. A hindrance to this ambition is the tendency of all three levels of government to act independently. Each has its own priorities and political agenda. These divided perspectives must be resolved, with collective recognition of the severity of the housing supply issue and joint action to rectify it.

Moving forward, the federal government needs to work closely with its provincial counterparts on national housing goals that break down to precise provincial goals and housing targets. The provinces in turn need to provide better resources, training, and guidance to municipalities around the development of their community plans. If all levels of government work with the same goal in mind and develop common best practices, major delays in the development approval process at the municipal level — which are currently a significant contributor to the current supply crisis — can be avoided.

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Strategically developed community plans that adapt national housing targets and plan out a realistic future to accommodate population growth and demographic changes are a needed standard across the province. With a concise strategy and clear outcomes that benefits their constituents, it should be easy for municipalities to get on board. But this relies on governments working together. Otherwise, we have a federal government dreaming big, without the message being accepted at the community-planning level.

An additional step to achieving a cohesive national housing strategy is to tie federal infrastructure investments to housing targets. This would help incentivize increased housing supply at the municipal level.

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High demand for housing isn’t likely to go away any time soon, with the Canadian government continuing to set ambitious yearly immigration targets for future years. This requires a parallel national housing supply strategy.

This is the time for the federal government to lead and better align all three levels of government into a coordinated housing approach that significantly expands housing supply targets of all types, where and when it’s needed. The final report by the Canada-British Columbia Expert Panel on the Future of Housing Supply and Affordability has just been released. In it, one of the five key calls to action is “Improving coordination among and within all orders of government.” Clearly this is a key aspect to tackling this complex national policy issue. Canada is a unique landscape. Across the country each province and municipality feels distinct. Yet in the end, we’re all Canadian. It’s time for our political leaders to work together to increase housing supply. And if they do, we will all benefit.

Darlene Hyde is CEO and Dan Morrison is chair of the B.C. Real Estate Association.

 

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