When he took office earlier this week, Vancouver mayor-elect Kennedy Stewart inherits the challenge of tackling one of the continent’s most difficult housing crises. The big question here is can he fix housing affordability? In my opinion, the peripheral areas of downtown Vancouver are never going to be affordable for the average Vancouver wage earner of $60,000 per annum. If you are on the sidelines waiting for the NDP government or mayor-elect Kennedy Stewart to correct the Vancouver housing market to make it affordable for the average wage earner, it’s likely not going to happen.
The truth is we are a victim of our own success. Vancouver is one of the most desirable cities to live in the world. Vancouver is also a land-locked peninsula, surrounded by oceans and mountains. Unlike Calgary or Edmonton, AB, we can only build out one way, and that’s East.
As I mentioned before, with interest rates being at record lows for almost a decade, this is a huge catalyst for price growth. Interest rates have been creeping up since 2017, but in a historical context, even if interest rates doubled, they would still be low.
The bottom line is, there is a huge amount of demand to live in Vancouver, but there is limited housing supply. With overregulation e.g. permitting delays, developer cost levies, zoning regulations, public and political pushback to overdevelopment etc. supply simply can’t keep up with demand.
Irrespective of how the new major intervenes, it doesn’t affect the long-term dynamic of where Vancouver will be in the next 20 to 30 years. Unless the government plans to build 70,000 comprehensive multi-family homes per year for the next decade, I only see housing affordability getting worst. There’s no better time to get your foot in the Vancouver housing market door than the present.
