by Christopher Kutyn

It is said that humility is a good thing.  Most in the real estate appraisal business can attest to the occasional humbling experience over the past two years, as we struggle to make sense of the most dynamic market most of us have ever known.

 

Readers will know that we have been banging on about the supply side for some time. Strangled supply and over zealous regulatory regimes, I maintain are a big part of the problem.

 

Attached below are two links from Josh Gordon PhD, Assistant Professor at the School of Public Policy at SFU, which speak to the demand side. Government has been very slow to collect data on foreign ownership since Mark Carney, the then Governor of the Bank of Canada, warned of the effects in 2011. To some extent, we still don’t really know what we are dealing with.

 

One study found that over 90% of ‘foreign buying’ was from China.  More recently, the chief economist at CIBC estimated that over 35% of the Vancouver market was ‘foreign money’. We recently highlighted that over 30% of the buyers of Comox Valley properties come from the Lower Mainland.

 

Is this a ‘bubble’, or the new reality?

 

In my opinion, it is unlikely that Government will move to effectively address the issue on the demand side. Surging prices have far outstripped local income gains.  Perhaps the supply side of the equation cannot entirely solve the affordability problem, but the issue needs to be re-addressed.  Most planning policy, and associated regulations such as OCP’s, zoning bylaws and Regional Growth Strategies were written well before this new reality

 

Housing Price Lunacy Moves East

Vancouver’s Housing Affordability Crisis

 

 

Comox Valley

Single Family Houses Sold

778 16% YTD
871 15% 12MTD
$ 486,287 20% 12MTD

Campbell River

Single Family Houses Sold

535 7% YTD
610 6% 12MTD
$ 398,751 16% 12MTD
Feeling isn't thinking, but many kids can't tell the difference. - John Stonestreet - 'A Practical Guide To Culture'.

Christopher Kutyn

Chris has been appraising Real Estate for over 30 years and has served on the board for the local chapter of the Appraisal Institute of Canada.

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