Vancouver's Housing Supply Myth

[whatnext]

The tired argument that all we need to do is build more housing is trotted out on SSP so frequently, it needs to be demolished in its own thread. Here's some actual research:

In Vancouver, the detached house owner is often vilified. So too, is the resident who protests density.

They are vilified by what one academic is calling "the housing supply myth," which is the belief that we need more housing in order to lower costs. It's an argument commonly used by politicians, industry, and some academics and citizen activists.

"There is an intuitive appeal to that argument," says Dr. John Rose, who spent the last year on education leave, researching the popular belief that Vancouver has a lack of housing supply. "We understand this idea of supply and demand, intuitively, even if you haven't taken an economics course."

However, he has concluded that Vancouver does not have a shortage of housing units. In fact, we have a surplus. And, as anybody in Metro Vancouver knows, prices have not plummeted as a result.

"If we are looking back at the last 15 to 20 years, we have been providing more than enough units of housing – and it's still unaffordable.

"And yet, you see this argument being thrown out there by various quarters, that we have this housing shortage."

Dr. Rose is an instructor in the department of geography and environment at Kwantlen Polytechnic University. He's been teaching there since 2002. He calls his report The Housing Supply Myth, based on data from the Statistics Canada censuses and the Demographia Survey House Price Data. He also looked at supply in housing markets elsewhere in Canada, the United States and Australia...

...In order to ensure his findings weren't just a blip, Dr. Rose went back to the 2001 census, covering a 15-year span. He found that for each household added during this period, the region added 1.19 net units of housing. Put another way, for every 100 households that came along, Metro Vancouver added 119 net units of housing. According to census data, there are also 66,719 unoccupied dwellings in Metro Vancouver...

https://www.theglobeandmail.com/real...ticle37015584/

[Aroundtheworld]

I think there are a few things to think about here:

1) What is the price of buying housing vs. what is the price of renting housing?

2) Are we building enough supply for current demand and are we building enough for future demand?

For the 1st question, I think it's important to realize both ownership and rental markets have different economics. I think he's indeed right that speculation is driving up the value of purchasing a home. However, speculation shouldn't affect rents. Rents are more dictated by the supply of rental housing and the incomes of renters. Vancouver still has the highest rents in the country so there has to be a reason beyond speculation for it.

For the second question, we may be building enough units now to handle current demand. However, that doesn't mean we can stop and things will be good forever. People will continue to move here and the economic is heating up as well. If we pretend that we can keep certain areas the same in perpetuity we'll have San Francisco-level affordability problems.

[goldenboi]

Originally Posted by Aroundtheworld

I think there are a few things to think about here:
For the 1st question, I think it's important to realize both ownership and rental markets have different economics. I think he's indeed right that speculation is driving up the value of purchasing a home. However, speculation shouldn't affect rents. Rents are more dictated by the supply of rental housing and the incomes of renters. Vancouver still has the highest rents in the country so there has to be a reason beyond speculation for it.

Not entirely true. The markets for renting and owning a home are closely related and they can be substituted for each other. E.g. If prices for owning a home are rising, people will move to the rental market, increasing the demand and price for rental units. You can't separate them entirely. Housing is housing.

[a very long weekend]

The article is outlining very dumb arguments but it's at least a clear and lucid account of the thinking dominating the planning department, political class and many residents.

Basically, this crackpot geography/environmentalism professor is saying that supply has increased a little bit more than population growth, so that means that supply isn't the problem, that demand is. So, the appropriate policy tools are those that would kneecap demand and growth.

Putting aside how you intend to keep population growth and housing starts at their current levels if you hammer demand for housing, just think about how dumb it is to look at all these people wanting to pour money into your region and to tell them - "no, we can't, we must protect the 75% of the city made up of automobile-oriented detached low rise housing, that is the imperative. We've had enough economic growth thank you very much, now we want decline."

It's nuts. People want to make movies in Vancouver, but that's making movie equipment rentals expensive, I know, we'll tax foreign movie companies. Companies want to make software in Vancouver, but that's pushing up salaries and making it hard for local companies to compete for top talent, I know, we'll put a tax on foreign companies coming in.

Edit: this is a good thread.

[mezzanine]

I'd disagree. New housing priced at a premium now depreciates and becomes older stock that moderates rents/prices.

It is hard to plan policy around a demand that can change on a dime and supply that takes months to years to come to fruition. I also suspect that many still doubt that a lot of people want to move to Vancouver, which drives demand.

Lack of Supply Drives High Housing Costs. As we demonstrate in California’s High Housing Costs, a shortage of housing results in high and rising housing costs. When the number of households seeking housing exceeds the number of units available, households must try to outbid each other, driving up prices and rents. Increasing the supply of housing can help alleviate this competition and, in turn, place downward pressure on housing costs.

Building New Housing Indirectly Adds to the Supply of Housing at the Lower End of the Market. New market–rate housing typically is targeted at higher–income households. This seems to suggest that construction of new market–rate housing does not add to the supply of lower–end housing. Building new market–rate housing, however, indirectly increases the supply of housing available to low–income households in multiple ways.

Housing Becomes Less Desirable as It Ages . . . New housing generally becomes less desirable as it ages and, as a result, becomes less expensive over time. Market–rate housing constructed now will therefore add to a community’s stock of lower–cost housing in the future as these new homes age and become more affordable. Our analysis of American Housing Survey data finds evidence that housing becomes less expensive as it ages. Figure 1 shows the average rent for housing built between 1980 and 1985 in Los Angeles and San Francisco. These housing units were relatively expensive in 1985 (rents in the top fifth of all rental units) but were considerably more affordable by 2011 (rents near the median of all rental units). Housing that likely was considered “luxury” when first built declined to the middle of the housing market within 25 years.

. . . But Lack of New Construction Can Slow This Process. When new construction is abundant, middle–income households looking to upgrade the quality of their housing often move from older, more affordable housing to new housing. As these middle–income households move out of older housing it becomes available for lower–income households. This is less likely to occur in communities where new housing construction is limited. Faced with heightened competition for scarce housing, middle–income households may live longer in aging housing. Instead of upgrading by moving to a new home, owners of aging homes may choose to remodel their existing homes. Similarly, landlords of aging rental housing may elect to update their properties so that they can continue to market them to middle–income households. As a result, less housing transitions to the lower–end of the housing market over time. One study of housing costs in the U.S. found that rental housing generally depreciated by about 2.5 percent per year between 1985 and 2011, but that this rate was considerably lower (1.8 percent per year) in regions with relatively limited housing supply.

http://www.lao.ca.gov/Publications/Report/3345

[Migrant_Coconut]

Originally Posted by a very long weekend

Basically, this crackpot geography/environmentalism professor is saying that supply has increased a little bit more than population growth, so that means that supply isn't the problem, that demand is. So, the appropriate policy tools are those that would kneecap demand and growth.

Agreed, that's pretty stupid "evidence" for a demand-side solution... the fact that our tiny city of 2.5 million people is somehow the fourth-densest in North America (beaten by Mexico City, NYC and San Fran) is more compelling.

Originally Posted by a very long weekend

Putting aside how you intend to keep population growth and housing starts at their current levels if you hammer demand for housing, just think about how dumb it is to look at all these people wanting to pour money into your region and to tell them - "no, we can't, we must protect the 75% of the city made up of automobile-oriented detached low rise housing, that is the imperative.

We're also North America's third-densest metro region (Mexico City again, and Montreal). By all means, let's rezone our SFHs, but surely there's some happy middle ground between "sleepy lumberjack/fishing town" and "pre-sold foreign condos everywhere?"

Originally Posted by a very long weekend

It's nuts. People want to make movies in Vancouver, but that's making movie equipment rentals expensive, I know, we'll tax foreign movie companies. Companies want to make software in Vancouver, but that's pushing up salaries and making it hard for local companies to compete for top talent, I know, we'll put a tax on foreign companies coming in.

Funny, because said software companies won't move in - or can't get employees from outside BC - because the high real estate prices scare them off. Deflate the bubble, and real estate money gets replaced with tech money almost overnight.

A better metaphor would be that overseas film crews get first dibs on renting movie equipment... so we're evening the playing field with a tax.

[mezzanine]

Originally Posted by Migrant_Coconut

Agreed, that's pretty stupid "evidence" for a demand-side solution... the fact that our tiny city of 2.5 million people is somehow the fourth-densest in North America (beaten by Mexico City, NYC and San Fran) is more compelling.



We're also North America's third-densest metro region (Mexico City again, and Montreal).

What's the source of this? I'd wonder what metropolitan boundaries they would use.

[Aroundtheworld]

Originally Posted by Migrant_Coconut

Agreed, that's pretty stupid "evidence" for a demand-side solution... the fact that our tiny city of 2.5 million people is somehow the fourth-densest in North America (beaten by Mexico City, NYC and San Fran) is more compelling.



We're also North America's third-densest metro region (Mexico City again, and Montreal). By all means, let's rezone our SFHs, but surely there's some happy middle ground between "sleepy lumberjack/fishing town" and "pre-sold foreign condos everywhere?"



Funny, because said software companies won't move in - or can't get employees from outside BC - because the high real estate prices scare them off. Deflate the bubble, and real estate money gets replaced with tech money almost overnight.

I agreed with everything you said except for the last point about tech. Real estate prices are way higher in San Francisco and that hasn't really stopped the Bay Area from attracting tech companies or talent. High real estate prices don't help, but they are not a deal breaker. Tech jobs tend to be well paying and can handle higher living expenses. I worry more about public sector jobs when living costs go up.

The main thing hindering tech in Vancouver is we don't yet have a big ecosystem of established tech companies and investors here, not real estate prices.

[Prometheus]

This is what the group of local economists who proposed the empty house tax (the BCHAF) have to say about the root cause of Vancouver's real estate affordability problem:

"The fundamental drivers of local housing prices are high demand and limited supply. The only way to have a decisive impact on affordability would be to weaken the building restrictions that sharply restrict new housing supply in most of Vancouver and the Lower Mainland. Major improvements in affordability are only possible by allowing supply to respond to changing demand. This proposal [the empty house tax] is a modest step to help out, but won’t address the underlying problem of supply restraints."

Signatories:

Thomas Davidoff, Sauder School of Business, UBC
Tsur Somerville, Sauder School of Business, UBC
Anthony Boardman, Sauder School of Business, UBC
Sanghoon Lee, Sauder School of Business, UBC

Elena Siminitzi, Sauder School of Business, UBC
Jack Favilukis, Sauder School of Business, UBC
​David Silver, Sauder School of Business, UBC
David Green, Vancouver School of Economics, UBC

Hiro Kasahara, Vancouver School of Economics, UBC
Angela Tardif, Vancouver School of Economics, UBC
Nancy Gallini, Vancouver School of Economics, UBC

Sumeet Gulati, Food and Resource Economics, UBC
Paul Schrimpf, Vancouver School of Economics, UBC
Francesco Trebbi, Vancouver School of Economics, UBC
Yaniv Yedid-Levi, Vancouver School of Economics, UBC

Alvaro Parra, Sauder School of Business, UBC
Jim Brander, Sauder School of Business, UBC
Keith Head, Sauder School of Business, UBC
Werner Antweiler, Sauder School of Business, UBC

Masao Nakamura, Sauder School of Business, UBC
Jim Vercammen​, Food and Resource Economics, UBC
Vanessa Alviarez, Sauder School of Business, UBC
Florian Hoffmann, Vancouver School of Economics, UBC

​Matilde Bombardini, Vancouver School of Economics, UBC
Joshua Gottlieb, Vancouver School of Economics, UBC
Henry Siu, Vancouver School of Economics, UBC
Paul Beaudry, Vancouver School of Economics, UBC

​Mukesh Eswaran, Vancouver School of Economics, UBC
Yoram Halevy, Vancouver School of Economics, UBC
Siwan Anderson, Vancouver School of Economics, UBC
Joe Henrich, Vancouver School of Economics, UBC

Ashok Kotwal, Vancouver School of Economics, UBC
Mauricio Drelichman, Vancouver School of Economics, UBC
Giovanni Gallipoli, Vancouver School of Economics, UBC
Kevin Milligan, Vancouver School of Economics, UBC

Vitor Farinha Luz, Vancouver School of Economics, UBC
Thorsten Rogall, Vancouver School of Economics, UBC
Jesse Perla, Vancouver School of Economics, UBC
Vadim Marmer, Vancouver School of Economics, UBC
​
Margaret Slade, Vancouver School of Economics, UBC
Chuck Blackorby, Vancouver School of Economics, UBC
Sam Hwang, Vancouver School of Economics, UBC
Thomas Lemieux, Vancouver School of Economics, UBC

​Jamie Mccasland, Vancouver School of Economics, UBC
Tom Ross, Sauder School of Business, UBC
Jose Pineda, Sauder School of Business, UBC
​Paul Kershaw, School of Population & Public Health, UBC

​
Source: http://www.housingaffordability.org/faqs.html

[whatnext]

Originally Posted by Prometheus

This is what the group of local economists who proposed the empty house tax (the BCHAF) have to say about the root cause of Vancouver's real estate affordability problem:



Signatories:

Thomas Davidoff, Sauder School of Business, UBC
Tsur Somerville, Sauder School of Business, UBC
Anthony Boardman, Sauder School of Business, UBC
Sanghoon Lee, Sauder School of Business, UBC

Elena Siminitzi, Sauder School of Business, UBC
Jack Favilukis, Sauder School of Business, UBC
​David Silver, Sauder School of Business, UBC
David Green, Vancouver School of Economics, UBC

Hiro Kasahara, Vancouver School of Economics, UBC
Angela Tardif, Vancouver School of Economics, UBC
Nancy Gallini, Vancouver School of Economics, UBC

Sumeet Gulati, Food and Resource Economics, UBC
Paul Schrimpf, Vancouver School of Economics, UBC
Francesco Trebbi, Vancouver School of Economics, UBC
Yaniv Yedid-Levi, Vancouver School of Economics, UBC

Alvaro Parra, Sauder School of Business, UBC
Jim Brander, Sauder School of Business, UBC
Keith Head, Sauder School of Business, UBC
Werner Antweiler, Sauder School of Business, UBC

Masao Nakamura, Sauder School of Business, UBC
Jim Vercammen​, Food and Resource Economics, UBC
Vanessa Alviarez, Sauder School of Business, UBC
Florian Hoffmann, Vancouver School of Economics, UBC

​Matilde Bombardini, Vancouver School of Economics, UBC
Joshua Gottlieb, Vancouver School of Economics, UBC
Henry Siu, Vancouver School of Economics, UBC
Paul Beaudry, Vancouver School of Economics, UBC

​Mukesh Eswaran, Vancouver School of Economics, UBC
Yoram Halevy, Vancouver School of Economics, UBC
Siwan Anderson, Vancouver School of Economics, UBC
Joe Henrich, Vancouver School of Economics, UBC

Ashok Kotwal, Vancouver School of Economics, UBC
Mauricio Drelichman, Vancouver School of Economics, UBC
Giovanni Gallipoli, Vancouver School of Economics, UBC
Kevin Milligan, Vancouver School of Economics, UBC

Vitor Farinha Luz, Vancouver School of Economics, UBC
Thorsten Rogall, Vancouver School of Economics, UBC
Jesse Perla, Vancouver School of Economics, UBC
Vadim Marmer, Vancouver School of Economics, UBC
​
Margaret Slade, Vancouver School of Economics, UBC
Chuck Blackorby, Vancouver School of Economics, UBC
Sam Hwang, Vancouver School of Economics, UBC
Thomas Lemieux, Vancouver School of Economics, UBC

​Jamie Mccasland, Vancouver School of Economics, UBC
Tom Ross, Sauder School of Business, UBC
Jose Pineda, Sauder School of Business, UBC
​Paul Kershaw, School of Population & Public Health, UBC

​
Source: http://www.housingaffordability.org/faqs.html

Awful lot of UBC /Sauder School of Business signatories. Aren't they the ones who administer the Real Estate Program...

[whatnext]

Originally Posted by mezzanine

I'd disagree. New housing priced at a premium now depreciates and becomes older stock that moderates rents/prices.

It is hard to plan policy around a demand that can change on a dime and supply that takes months to years to come to fruition. I also suspect that many still doubt that a lot of people want to move to Vancouver, which drives demand.


http://www.lao.ca.gov/Publications/Report/3345

Oh you mean like this? Over 22 years old for over 1,000 sq/ft? Not a lot of depreciation going on there, or any other unit for sale in Vancouver. In fact prices of tired old units are dragged upwards by speculators doing Buy and Flips after a lick of paint and new cabinets.

https://www.rew.ca/properties/R22213...h_id=603129226

[mezzanine]

Originally Posted by whatnext

Oh you mean like this? Over 22 years old for over 1,000 sq/ft? Not a lot of depreciation going on there, or any other unit for sale in Vancouver.

https://www.rew.ca/properties/R22213...h_id=603129226

What's the price of a comparably-sized and located suite in a building 2 years old?

[whatnext]

Originally Posted by mezzanine

What's the price of a comparably-sized and located suite in a building 2 years old?

But your argument was that older stock moderates prices. It certainly hasn't moderated them to bring them closer into anything resembling affordability. Rather they just become more fodder in the speculative bubble.

I posted these stats elsewhere before and they;re worth revisiting.

Housing Starts 2015
City Metro Population Starts
Vancouver 2.5 mil 20,863
San Francisco 4.65 mil 12,766
Los Angeles 9.8 mil. 23,500
London (UK) 8.6 million 24,230
Dallas-FW Pop: 7.1 million Housing starts: 22,550

It's clear Vancouver is producing units not for population but for speculation.

[Jebby]

Originally Posted by whatnext

But your argument was that older stock moderates prices. It certainly hasn't moderated them to bring them closer into anything resembling affordability. Rather they just become more fodder in the speculative bubble.

I posted these stats elsewhere before and they;re worth revisiting.

Housing Starts 2015
City Metro Population Starts
Vancouver 2.5 mil 20,863
San Francisco 4.65 mil 12,766
Los Angeles 9.8 mil. 23,500
London (UK) 8.6 million 24,230
Dallas-FW Pop: 7.1 million Housing starts: 22,550

It's clear Vancouver is producing units not for population but for speculation.

Can you provide a source?

[Migrant_Coconut]

Originally Posted by mezzanine

What's the source of this? I'd wonder what metropolitan boundaries they would use.

Several census estimates... and/or a bit of number-crunching I did when I was bored.

It's true that the States uses an unorthodox means of drawing boundaries, so with the metro population, I'm using "Greater (City Name)" or "Metropolitan Area;" my guess, "Combined Statistical Area" is the equivalent of Lions Bay to Hope.

N.A. CITY DENSITY

1) New York City, 10,890/sq km

2) San Francisco, 7,170/sq km

3) Mexico City, 6,000/sq km

4) Vancouver, 5,493/sq km

5) Boston, 5,368/sq km

6) Chicago, 4,600/sq km

(Toronto's at 4,149, somewhere below Chicago)

N.A. METRO DENSITY

1) Mexico City 2,469/sq km

2) Montreal, 890/sq km

3) Vancouver, 855/sq km

4) Toronto, 849/sq km

But don't just take my word for it, feel free to search for better numbers, or ones that I missed.

Originally Posted by Aroundtheworld

I agreed with everything you said except for the last point about tech. Real estate prices are way higher in San Francisco and that hasn't really stopped the Bay Area from attracting tech companies or talent... The main thing hindering tech in Vancouver is we don't yet have a big ecosystem of established tech companies and investors here, not real estate prices.

Note that San Fran is a more vibrant city with higher wages. Right now, we're busy attracting the "code monkey" kind of tech worker.

But I'm mostly referring to startups - even Google and Facebook began with nothing. And we sure as hell won't get any future Googles or Facebooks with these land costs.

[GreaterMontréal]

Originally Posted by Migrant_Coconut

Several census estimates... and/or a bit of number-crunching I did when I was bored.

It's true that the States uses an unorthodox means of drawing boundaries, so with the metro population, I'm using "Greater (City Name)" or "Metropolitan Area;" my guess, "Combined Statistical Area" is the equivalent of Lions Bay to Hope.

N.A. CITY DENSITY

1) New York City, 10,890/sq km

2) San Francisco, 7,170/sq km

3) Mexico City, 6,000/sq km

4) Vancouver, 5,493/sq km

5) Boston, 5,368/sq km

6) Montréal 4,662.1/sq km

(Toronto's at 4,149, somewhere below Chicago)

N.A. METRO DENSITY

1) Mexico City 2,469/sq km

2) Montreal, 890/sq km

3) Vancouver, 855/sq km

4) Toronto, 849/sq km

But don't just take my word for it, feel free to search for better numbers, or ones that I missed.



Note that San Fran is a more vibrant city with higher wages. Right now, we're busy attracting the "code monkey" kind of tech worker.

But I'm mostly referring to startups - even Google and Facebook began with nothing. And we sure as hell won't get any future Googles or Facebooks with these land costs.

Montréal (city) . ahead of Toronto. and the density is growing each year., should pass 5000/km² by 2020 easily.

when you look at the 2016 Census , 29% of Vancouver's total dwellings are single family home, 3% lower than Montréal and 10% lower than Toronto. in fact, your city is probably the most balanced of them all.
http://www12.statcan.gc.ca/census-re...016005-eng.cfm

[mezzanine]

Originally Posted by whatnext

But your argument was that older stock moderates prices. It certainly hasn't moderated them to bring them closer into anything resembling affordability.

But it`s all relative. You may think that a 1 bedroom condo in an older downtown building for $599K is expensive but compare that to the 1 BRs in new buildings.

I agree affordaility in DT is a challenge compared to other areas, but I suspect it would be worse if we hadn't built up housing stock.

[Changing City]

The whole basis of the Globe news article is based on a flawed statistical analysis. Dr. Rose doesn't seem to be familiar with Census data, or how the Census has changed over time. As a result his conclusions are dubious, to say the least.

He's citing change over 15 years, so he's going back to the 2001 Census for his base data. That year Statistics Canada counted 786,285 dwellings in Metro Vancouver (technically, the Vancouver CMA), of which 758,720 were not occupied by 'usual residents'. That's a 3.5% rate of 'not occupied by usual residents'. It's actually less than in 1996, when 4.3% of dwellings were not occupied by 'usual residents'.

Note that these aren't necessarily actually 'vacant' dwellings - they might be occupied by foreign or temporary residents, who don't get counted. In 2001 6,735 dwellings were occupied on that basis but not considered occupied by usual residents. Other dwellings might be used as second homes, during the week by business people for example, but not considered 'occupied' because another dwelling is the family home. There are a whole number of other reasons why a dwelling might not be counted as 'occupied'. Some dwellings will be vacant because they're being renovated, awaiting demolition, or for sale by owners who have already moved elsewhere. Some will be vacant because they're in a recently completed apartment building, but not all the units have been occupied on the day of the Census.

In 2006 Statistics Canada switched from collecting Census forms, to mailed and online Census returns. In making that change, they made a real effort to collect addresses to contact the population. One outcome of that change was that they found thousand of new dwellings, many of them secondary and basement suites. They weren't necessarily 'legal' or authorized, but they collected addresses from all sorts of sources. If a bank statement or Cable TV bill was sent to 'Basement Suite, 123 Wherever Road', then they counted that as two dwellings in the home. You can see the change very clearly in Vancouver; the number of occupied single family dwellings dropped between 2001 and 2006 by nearly 40,000. Nobody thinks they were all demolished, or replaced in those five years - it's just that they were reclassified as duplex (house with a suite), or if they found two suites, apartments.

In 2006 the proportion of dwellings that were 'not occupied by usual residents' went up sharply, to 6.2% of the dwellings. In 2011 it was almost the same, at 6.1%. In 2016, in the latest census, it went up a bit more to 6.5%. So over three census periods it hardly changed at all.

In the City of Vancouver there was a lot of fuss about how 'empty' Marine Gateway and the area near Joyce station were in the 2016 Census. Commentators argued they were all being bought by investors, or flipped. But remember that some units will be vacant because they're in a recently completed apartment building, but not all the units have been occupied on the day of the Census? Looking at the individual block counts of dwellings that's exactly what happened in those two locations - there were several hundred units that were counted as existing - although they might not actually have had an occupancy permit - but nobody had moved in on Census day. That circumstance particularly applies when there's been a building boom and large residential projects are coming on stream. That circumstance was far more true in 2016 than it was in 2011 - there were over 18,000 dwellings completed in 2016 in Metro Vancouver, compared to 13,000 in 2011.

There's some suggestion that the number of dwellings occupied by temporary and foreign workers was also higher in 2016, but Statistics Canada don't seem to have published those numbers yet. Remember those count as 'not occupied by usual residents' as well. As we also know, some would have been Air B&B units as well.

The 6.5% 'not occupied by usual residents' in Greater Vancouver is less than in BC as whole (8.8%), Canada as a whole (8.8%), less than Portland (7.8%) and similar to Seattle (6.4%). Edmonton and Regina have higher proportions; Montreal and Toronto a little lower.

[whatnext]

Originally Posted by Jebby

Can you provide a source?

Googled from the relevant government agencies or builders association.

Nobody has been able to explain why Vancouver has been churning out nearly the same number of units of cities that are far larger. It’s not like those cities don’t attract larger number of immigrants or internal migration.

[Changing City]

Originally Posted by whatnext

But your argument was that older stock moderates prices. It certainly hasn't moderated them to bring them closer into anything resembling affordability. Rather they just become more fodder in the speculative bubble.

I posted these stats elsewhere before and they;re worth revisiting.

Housing Starts 2015
City Metro Population Starts
Vancouver 2.5 mil 20,863
San Francisco 4.65 mil 12,766
Los Angeles 9.8 mil. 23,500
London (UK) 8.6 million 24,230
Dallas-FW Pop: 7.1 million Housing starts: 22,550

It's clear Vancouver is producing units not for population but for speculation.

Those few examples really don't make anything clear. It's well known that San Francisco has had a restricted housing market, which is why their home prices make ours look cheap. The same is true for London.

It also depends on the year you look at - the 2016 numbers (source) show Dallas Fort Worth with 55,618 housing starts. Seattle, with a population of 3.7mil had 25,516. Austin, with a population of 2.0 mil had 22,242 starts - so more starts and a smaller population base than Vancouver.

Are some Vancouver units being bought as investments, either to hold and sell when (if) prices rise, or for Air B&B rental potential, or for flipping on completion? Yes, of course some are. But can that explain why prices have risen like they have? Not as the only explanation, no.

You also can't say if the construction we have seen has moderated prices in older stock, because there isn't a parallel universe to access to see what would have happened to house prices if the new stock hadn't been built. The evidence out of San Francisco, where they didn't build much new stock, suggests the prices could have risen even more.