Amid a greater inbound population and ever-dwindling supply, hopeful home buyers should not hold their breath for cheaper homes in Vancouver, a prominent B.C. economist said.
Central 1 Credit Union chief economist Helmut Pastrick noted that the influx of an estimated one million immigrants from now up to 2041 will make the ongoing affordability crisis worse, especially for young professionals and new families.
“We just have a shortage of land,” Pastrick stated in a September 27 convention, as quoted by the Vancouver Sun
. “As long as we have ongoing growth, we will see increased demand for housing.”
“High house prices are crushing the young demographic’s dreams in this province,” he said, adding that the average millennial would need at least 15 years to save for the down payment of a condo.
However, while these developments would make Canada’s hottest market even more bloated, Vancouver will not be alone in the mad rush for desirable properties.
“I think it will be a national and global development as well,” Pastrick said.
To address the issue before it reaches the point of no return, Pastrick argued that provincial authorities should prioritize the creation of more rental spaces, as well as work towards significant reduction of income taxes.
“We will see more renters than we do today, largely because of the unaffordability.”
The consistent price growth in the west coast city has made it a prime candidate for a housing bubble. In its latest assessment of 18 metropolitan markets worldwide, Swiss bank UBS found that Vancouver outstripped other overheated global markets like London, Stockholm, Sydney, and Munich in terms of real estate meltdown risk.
“The risk of substantial price correction appears very elevated,” according to the UBS report. “Real house prices have increased by more than 25 per cent since 2014 in the wake of a weak Canadian dollar which apparently stimulated Asian demand even further.”
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