03/11/2023
The housing market in Greater Vancouver has experienced a rollercoaster ride over the last few years, with the pandemic and low mortgage rates driving a buying frenzy in 2021, followed by interest rate hikes and a cooling-off period in 2022. Now, in February 2023, the market appears to have stabilized and we're seeing the first month-to-month home price increase in nine months.
However, despite buyer demand, low supply is causing a scarcity of listings in the market. The number of new listings in February was the lowest for that month going back to pre-1991. Buyers are competing with each other for far fewer listings, and the number of active listings is only up slightly from the end of last year.
The government is making it difficult for new home construction to take place. The federal government has banned foreign buyers, while the B.C. government is spending $500 million to stop or stall private redevelopment of older rental buildings into higher-density housing projects. Metro municipalities are also raising development cost charges, which is adding to the problem of low supply.
For residential investors, the consistent housing shortage is a blessing, but for home buyers, it's creating a seller's market that shows no signs of slowing down. We need more supply to keep up with demand, but restrictive zoning and slow-moving development approvals are preventing that from happening.
It's time for governments at all levels to address the supply of "missing middle" housing for families and take action to encourage more housing starts. Otherwise, the housing shortage in Greater Vancouver will continue to fuel a seller's market, regardless of demand.
Link in bio for the full report.
