Last week’s sold-out Urban Development Institute breakfast session went deep on British Columbian attitudes around housing and the recent cooling measures by governments. Resonance Consultancy presented the future-look part of the briefing, featuring data from our Future of B.C. Housing study.
By Chris Fair
With a provincial election looming, and housing-related issues topping the concerns of voters, real estate is on the minds of citizens and developers alike.
Resonance partnered with research firm Insights West to survey more than 1,700 British Columbians about their sentiment around housing in the province over the next five years.
Almost 200 UDI Pacific Region members—a mix of real estate brokers, architects and developers—filled the chandeliered conference room of the Pan Pacific hotel in downtown Vancouver to hear Steve Mossop, president of Insights West, Kira Gerwing, community investment manager at Vancity Credit Union and me discuss our collective research. Ben Smith, principal at Benjamin Advisory, was our patient moderator.
My main points are in our video briefing below, and you can read my takeaways from Steve’s and Kira’s informative presentations below.
President, Insights West
Steve kicked off the data torrent with a fresh presentation from his firm’s latest findings about the economic outlook among 1,000 British Columbians. Consistent with our Future of B.C. Housing study, Steve noted that housing is a top concern, trailing only “health care” and “government accountability.”
“Usually, in other provinces, housing is a blip [in elections],” he said. “But British Columbians are much more concerned about housing than other Canadians.”
Despite this anxiety around housing, current economic confidence has rebounded from a year earlier, as have expectations for a more prosperous future.
“The good news for developers and real estate professionals is that British Columbians think their own situation is going to get better relative to their previous year,” Steve noted. “As such, they seem to have no reservations about buying homes or renovating existing ones.”
But underneath the jubilation is real uncertainty, with 40% of Insights West respondents worried about their employer running into financial trouble, and 45% worried about making mortgage and rent payments. Additionally, more than 50% are worried about unemployment and losing their job.
“So despite the confidence, there are some dark clouds that could always derail the best of intentions,” Steve concluded.
Community Investment Manager, Vancity Credit Union
Kira came ready with a wealth of Vancity research from the past 18 months, and challenged developers in the room to think different in their partnerships as a way to create affordable housing in Greater Vancouver.
Starting off with a recent Millennial study created for younger Vancity members as well as their parents, Kira revealed that if current trends continue, the average property in Vancouver will require more than 100% of income by 2030. “The average property in the region will be unaffordable, requiring unsustainable debt loads to maintain home ownership,” she noted.
She warned of future labour shortages as salaries fall farther behind cost of living and drive workers to relocate elsewhere. “If the trend continues, 85 high-demand, key economic service occupations critical to our region’s economic future are likely to pay too little to support typical housing debt loads,” she said. “Only senior business managers would still be able to afford housing. That’s a lot of managers living in one community.”
Families will be particularly hard hit.
“Another one of our studies examined families in the context of a constrained affordable housing supply. Less than 1% of Metro housing stock is both suitable and adequate for the average young family seeking to move out of their starter homes.” Kira noted that the Vancity report she cited deemed suitable housing for families “as a three-bedroom, attached property such as a townhouse or a row house with access to a private yard.”
Kira finished with a compelling challenge to developers in the room, outlining Vancity’s Impact Real Estate strategy that identifies the key players in the local real estate system, the “objects” they move around that system, and how they perceive the flow of values. She offered Vancity’s capital and network to help developers “understand the underpinning economic paradigm driving buyer preferences, focusing on where the gaps are in the current system and what you can do to address those gaps.”
To learn more about the sentiment of B.C. residents towards housing, plus the opportunities and threats to the provincial real estate industry, download your free copy of the Future of B.C. Housing Report, or get in touch with us.