{"id":60,"date":"2016-04-04T15:42:25","date_gmt":"2016-04-04T19:42:25","guid":{"rendered":"http:\/\/www.dinani.ca\/blog\/?p=60"},"modified":"2016-04-04T16:33:27","modified_gmt":"2016-04-04T20:33:27","slug":"editorial-current-conversation-on-housing-affordability-is-making-it-much-worse","status":"publish","type":"post","link":"http:\/\/www.dinani.ca\/blog\/2016\/04\/04\/editorial-current-conversation-on-housing-affordability-is-making-it-much-worse\/","title":{"rendered":"Editorial: Current Conversation on Housing Affordability is Making it Much Worse"},"content":{"rendered":"
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A \u201cself-fulfilling crisis\u201d is being fuelled by rampant sensationalism about Vancouver real estate, leading to panic-buying. It\u2019s long past time to change the dialogue<\/h4>\n

Joannah Connolly<\/a><\/span> \u00a0REW.ca<\/span><\/h4>\n
April 1, 2016<\/div>\n
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\"bidding-war-on-north-burnaby-house\"<\/a><\/p>\n<\/div>\n<\/div>\n<\/div>\n

Many of you who read\u00a0REW.ca<\/a><\/em>\u00a0are looking for homes to buy in the Greater Vancouver area. Regular readers will also know that\u00a0I am on a similar journey<\/a>, hoping to buy a small rental unit so that one distant day from now I can afford to hang up my laptop and retire.<\/p>\n

And I don\u2019t need to tell you that it\u2019s madness out there. The sheer volume of people coming through the doors of the\u00a0open houses<\/a>\u00a0for one- and two-bed units that I saw was just staggering. And my well-over-asking offers have been laughed at by listing agents who are getting 20 or 25 per cent above list price. People seem to be panic-buying real estate, desperation in their eyes as they try to calculate just how much they can leverage themselves to make the highest bid.<\/p>\n

Why such terror? Because the current conversation on the topic of Vancouver real estate and lack of affordability has reached such a deafening fever pitch, there\u2019s hardly a person in the city who isn\u2019t having palpitations about it. People are seeing diminishing supply and the continued skyrocketing in average prices, they\u2019re told by mainstream media, or opposition politicians, that the situation has reached a catastrophic crisis point, and they panic. It\u2019s like a stock market crash \u2013 everyone starts selling stocks, so then everybody else does. If you\u2019re told there will be no more groceries in the stores, or gas in the pumps, you buy, buy, buy while you still can \u2013 it\u2019s human nature. That\u2019s partly what\u2019s happening in our real estate market.<\/p>\n

Add to that increasing population numbers, increasing international and provincial migration \u2013 simply more people, all wanting housing. Then you can further add to that the low cost of financing, meaning people are leveraging themselves to the hilt to get in, if they still can. The more all of that happens, the worse the situation gets \u2013 and then the more it happens. It\u2019s a spiral, all fed into by these myriad factors.<\/p>\n

So how can we stop the spiral? Well, you see which of those factors you can remove, of course.<\/p>\n

1. Only the Bank of Canada can change interest rates, and it doesn\u2019t look likely that they\u2019ll do that\u00a0any time soon<\/a>, so no dice there. If and when that happens, it will make a big difference to the rate of price growth.<\/p>\n

2. In my opinion, closing our borders and trying to suppress home-ownership for immigrats and interprovincial migrants is plain wrong. We\u2019re not about to start building any walls around Vancouver, to keep \u201cVancouver for Vancouverites.\u201d And let\u2019s face it, unless you\u2019re First Nations, we\u2019re all immigrants here.<\/p>\n

3. So, then, there\u2019s only one lever left to pull \u2013 change the dialogue. Stop the panicking, everybody calm down, and let\u2019s talk about practical, implementable solutions.<\/p>\n

I\u2019m far from the first person to suggest this. This week I attended the Vancouver Real Estate Forum, and there was one theme that came up again and again \u2013 it\u2019s time to change the conversation. The keynote speaker, CIBC World Markets chief economist Benjamin Tal, arguably Canada\u2019s leading housing market economist, was scathing in his assessment of mainstream media coverage of Vancouver\u2019s real estate market (you can read about that, along with his interest rate predictions,\u00a0here<\/a>). Elsewhere in his speech, he used the phrase \u201cself-fulfilling crisis\u201d and I thought how perfect that was to describe what\u2019s going on in our city. And later in the day, one session panellist, Beau Jarvis of developer Wesgroup, went even further, describing much of the mainstream media coverage of real estate as \u201csh***y journalism\u201d that had a lot to answer for.<\/p>\n

I see a lot of what Jarvis is talking about. Misinformation is being peddled right and left, and taken as fact by an understandably trusting public. Articles citing back-of-the-envelope guesstimates,\u00a0flawed foreign buyer studies<\/a>\u00a0and\u00a0nonsensical affordability surveys<\/a>\u00a0as fact.\u00a0Muddled affordability campaigns<\/a>\u00a0and\u00a0politically motivated housing rallies<\/a>\u00a0riling people up to boiling point. And a disproportionate focus on detached homes on the West Side \u2013 which is indeed a bizarre market \u2013 without putting this into the context of the whole of Greater Vancouver.<\/p>\n

But to the average person, messages like that are very convincing. I used to trust them myself, expressing my middle-class outrage over dinner with my friends (before I actually learned about how real estate markets work).<\/p>\n

It\u2019s this kind of sensationalism that has been creeping insidiously into the collective public consciousness, creating fear and anxiety and doing the opposite of what it purports to intend \u2013 it actually make things much worse.<\/p>\n

It stands to reason, therefore, that if the dialogue were to change, if the media and opposition politicians stopped peddling the blood-in-the-streets crisis messages, then everybody might stop panicking. People might stop thinking that if they don\u2019t buy now, they\u2019ll be left behind forever. Buying might temper its growth rate a little. Fewer investors might see Vancouver housing as a bandwagon to jump on. Price growth might slow, as we\u2019re all hoping it will \u2013 would-be buyers and home owners alike.<\/p>\n

What if, then, the dialogue turned to ways we can ease the massive shortage of housing, so that there\u2019s enough to go around for everybody? No more open houses with hundreds lining up around the block, no more terrifying best-offer multiple panic-bids. Just enough homes for all of us, whether \u201clocal\u201d or \u201cforeign\u201d buyers. And, for good measure, add in\u00a0sensible taxation policies<\/a>\u00a0to capture some of the international and domestic wealth that\u2019s coming into our market, to put towards non-market housing for low-income residents.<\/p>\n

Now everybody take a deep breath\u2026<\/p>\n


\u00a9 Copyright 2016<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/blockquote>\n

\u00a0*Source: Rew.ca News<\/div>\n","protected":false},"excerpt":{"rendered":"

A \u201cself-fulfilling crisis\u201d is being fuelled by rampant sensationalism about Vancouver real estate, leading to panic-buying. It\u2019s long past time to change the dialogue Joannah Connolly \u00a0REW.ca April 1, 2016 … [read more<\/a>]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[11],"tags":[],"_links":{"self":[{"href":"http:\/\/www.dinani.ca\/blog\/wp-json\/wp\/v2\/posts\/60"}],"collection":[{"href":"http:\/\/www.dinani.ca\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.dinani.ca\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.dinani.ca\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"http:\/\/www.dinani.ca\/blog\/wp-json\/wp\/v2\/comments?post=60"}],"version-history":[{"count":6,"href":"http:\/\/www.dinani.ca\/blog\/wp-json\/wp\/v2\/posts\/60\/revisions"}],"predecessor-version":[{"id":68,"href":"http:\/\/www.dinani.ca\/blog\/wp-json\/wp\/v2\/posts\/60\/revisions\/68"}],"wp:attachment":[{"href":"http:\/\/www.dinani.ca\/blog\/wp-json\/wp\/v2\/media?parent=60"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.dinani.ca\/blog\/wp-json\/wp\/v2\/categories?post=60"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.dinani.ca\/blog\/wp-json\/wp\/v2\/tags?post=60"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}