Vancouver homes prices will climb to $2.1 million by 2030

[Klazu]

Seems like NOW would be the perfect time to buy a house, when the average price is "only" 900k. Everyone is going to become a multi-millionaire in just 15 years!

A new housing report from the VanCity Credit Union says the average house price in Vancouver will climb to $2.1 million within 15 years.

Andy Broderick, Vancity's vice-president of community investment, says future homebuyers who want to stay in the Lower Mainland should lower their expectations of what they'll be able to afford to buy.

"We'll be looking at more and more comfort with condo ownership, with living in denser conditions," says Broderick.

The likelihood of new buyers owning a house with a white picket fence is pretty much nil as the report highlights that wages are not growing at anywhere near the same pace as housing prices.

Broderick says the desirability of living in Metro Vancouver is to blame.

"You're here for the very reasons that the place is unaffordable," says Broderick.

"Realize that you may not be able to buy the kind of house you'd buy far up the Fraser Valley."

The report highlights that although Vancouver is the second-most unaffordable city in the world, it's also been named the third-most liveable city in the world.

But the report also mentions that the cost of condos will rise as well, leaving the most affordable options in Metro Vancouver cities like Langley, Port Moody and Coquitlam.
Focus on millennials

The report focuses on home ownership for millennials, or those born approximately between 1980 and the early 2000s.

However, a recent report from U.S.-based Federated Investors highlighted that millennials in North America stand to inherit $30 trillion over the next few decades.

And a recent housing report from the Vancouver-based Urban Futures Institute showed that despite climbing home and condo prices, millennials were more likely to own a home in 2011 than they were in 2006. And yes, that pattern was the same specifically for the Metro Vancouver region as well.

Broderick says the exponential rise in the cost of home ownership is not inevitable.

"I think we all have to elevate our awareness of the problem and start asking our municipalities and our provincial government to pull together to come up with solutions," he says.

Some of the Vancity report's recommendations for various levels of government include changing zoning to increase density, creating affordable housing, and changing tax structures to create incentives for developers.

http://www.cbc.ca/news/canada/britis...port-1.3009944

[logan5]

Some of the Vancity report's recommendations for various levels of government include changing zoning to increase density, creating affordable housing, and changing tax structures to create incentives for developers.

Outside of a few heritage areas, the whole city should be zoned for at least row-house. With no alternative to condo's for most people, the lack of a middle ground product like row-house may be allowing developers to pump up the price of condo's.

[b5baxter]

As @YVRHousing said on Twitter:

"Area Credit Union report channels Disco Stu"

[WarrenC12]

Doubling of an asset over 15 years isn't exactly the investment of a lifetime. This article is just shock value.

As for YVRHousing and those types, they've been calling for a collapse for a decade. Chicken little and all...

[GMasterAres]

Depends on what the "doubling" value is.

Doubling of an asset is actually good in this case.

If you buy a $20 item and 15 years later it doubles to $40 then for sure it isn't worth it.

If you buy a $1 million and 15 years later it doubles to $2 million then that's not that shabby.

If you have $100 million and in 15 years it doubles to $200 million I don't think you'd complain.

Just saying 'doubling is bad' without putting dollar context is kind of meaningless.

I don't trust any predictions in the real-estate market beyond 5 years anyway. They've been predicting a lot of things that have never happened for over 30 years now in metro-Vancouver. There were predictions that Calgary and Edmonton real-estate would trump everyone in a few years yet they couldn't predict the sharp fall in oil prices.

There are a _lot_ of variables in Vancouver housing prices including the fact the city just has no more land in Vancouver itself. No land means development plots are at a premium. That won't change no matter how much city hall and anti-poverty advocates jump up and down screaming. Just like homelessness, not everything is solvable. Name 1 major city that has 0 homeless and I'll start to call it possible. I don't think anyone can name 1 major city on the planet. So it's just meaningless yabber.

[Smooth]

Originally Posted by WarrenC12

Doubling of an asset over 15 years isn't exactly the investment of a lifetime. This article is just shock value.

Just doing a rough calculation, that's a rate of return of 4.8% annually. Not horrible but not that great either. That's less than the average annual rate of return of the S&P 500.

Once you factor in property transfer tax and real estate agent fees, buying a house as an investment makes even less sense.

[nds88]

Originally Posted by Smooth

Just doing a rough calculation, that's a rate of return of 4.8% annually. Not horrible but not that great either. That's less than the average annual rate of return of the S&P 500.

Once you factor in property transfer tax and real estate agent fees, buying a house as an investment makes even less sense.

You need to measure return on the amount that was put down. If you pay cash, then the return is nothing to salivate over. However, most people put 20% down on a 1m property, ie 200k, and sell for 2m in 15 years. You made 5x your 200k.

Of course, there is interest and maintenance over the years to factor in. But if you are renting the house out and the rent covers the expenses, then a 5x return is not too shabby over 15 years.

[LeftCoaster]

Originally Posted by WarrenC12

Doubling of an asset over 15 years isn't exactly the investment of a lifetime. This article is just shock value.

Honestly.

At 2014 prices of 1.36 million, the implied growth rate to reach 2.1 million in 2030 is only 2.75 percent.

That's barely above inflation.

[cornholio]

It is important to note that if the market collapses, or falls behind the inflation rate and interest rates rise, VanCity Credit Union specifically is going to be going under...Its a even more biased source then the real estate industry. So...this report is about as useful as a used piece of toilet paper. Not very.

[trofirhen]

Originally Posted by logan5

Outside of a few heritage areas, the whole city should be zoned for at least row-house. With no alternative to condo's for most people, the lack of a middle ground product like row-house may be allowing developers to pump up the price of condo's.

* Good point. Wish more people would think on that.

[st7860]

Originally Posted by logan5

Outside of a few heritage areas, the whole city should be zoned for at least row-house. With no alternative to condo's for most people, the lack of a middle ground product like row-house may be allowing developers to pump up the price of condo's.

The row housing stuff has already started- almost- take a look into the Norquay Development Area near Kingsway and Slocan - lots are already going for over a million

[logan5]

The new Norquay zoning has been in place for a while now, and I don't think there has been one row-house or stacked townhouse project. I assume everybody is asking too much for their property. I've seen some properties along Clarendon up for sale for months.

Imo, there needs to be much more row-house zones to have any affect on housing prices.