LOOKING BACK & AHEAD

Looking Back

The previous issue we looked at High-rise sales continuing strong which proved to be the case; however they were far stronger than we expected with 65% of all new home sales in the first quarter of this year being highrise sales, followed by low-rise sales, with the least sales in single family homes and townhomes over the First Quarter of 2022. The price increases seen in 2021 could be directly related to affordability and price points, with high-rise and low-rise condos being the most affordable of the four product types.

The exciting and yet frustrating days of new developments selling out in hours or days seems to be ending, however time always seems to remain of the essence when you find the home that is right for you. Even in slower markets we always have to be aware that the home we love, could be someone else’s dream home too. We anticipated a busy or active quarter but certainly did not foresee more than 5,500 homes sold, let alone 6,323 homes sold to date.

Looking Ahead

Considering that our corner of the world only has so much space and is locked by mountains rivers and agricultural land in two directions, and an ocean and international border in the other two directions, it becomes obvious that we need to build ‘up’, instead of build ‘out’ in order to have enough homes for everyone that wants to live in the Lower Mainland and the Fraser Valley.

In addition to rising inflation and thus rising interest rates with at least two more increases anticipated this year, condominium sales are anticipated to remain the strongest of all the new home product types. Not only because they are the most affordable, but because they also offer a more social lifestyle, and most are now offering amenities that make working from home easy. How much more will interest rates increase? Will government eliminate the stress test now that rates are increasing and effectively accomplish what stress test is intended to do?

With supply remaining as the key issue to affordability in the Lower Mainland due to high demand from locals, retirees (and other Canadians fleeing minus 50 winters in the prairies for example), and soon refugees and new immigrants, it is important we all recognize this key issue and pressure our local city or municipality to facilitate supply that matches the pace of demand in each of our communities.

Though a daunting time-consuming task in the past, today most cities take e-mail inquiries and email letters of support to their local planning departments. If each of us took 5 minutes to Google the correct contact email for this for each of our local cities or municipalities it could go a long way. The same with emailing a quick email of support on new communities in your city or town. Usually only the small opposition comes out or sends in letters as the rest of us don’t have the time.

Now more than ever the rest of us need to step up and make our voices heard in a real effort to start supplying much needed housing and community amenities for everyone. Increasing the rate of supply would help balance the market and if possible, even work to slightly outpace it and further slow price increases to help allow incomes to catch up.

How will housing policy influence the municipal election this Fall?

Four years ago, city officials were elected and many of them have been directly attributed to prohibit development creating the high prices we saw over the last two years. Bear this in mind October 15th when voting for your new local council. Will they help increase supply with development? How will they continue to hinder it and slow it down for a few NIMBY’s who are keeping the supply too low for the vast majority?

Recently in conversation with our CEO, W. Scott Brown, he commented “Don’t compare your 41st birthday party to your 40th”, I laughed. Yes, 2021 was an outlier and it helps to keep that in mind. While I do not care for the term normal (what does it mean anyway?) we do find ourselves in dynamic yet more typical market conditions compared to 2021.

If you have a view you would like to share and/or questions you would like to discuss, please contact jamie@fifthave.ca