With a picturesque landscape and limited expansion the only place for Vancouver to move is up, both in density and in price. Vancouver.ca states annual construction values were at 3.24 billion dollars in 2015. With the increased construction, economies like Skilled trades saw an immediate jump in employment . In addition, transportation companies, lumber industries and landscape companies in Vancouver all have seen a trickle-down effect of the increased productivity. Greater-Vancouver area residents experienced a spike in house value, but is too much of a good thing hurting Vancouver’s livability?
As is true with many Canadian provinces construction is one of the major employers in British Columbia. With promises of grants, solid pay, a future shortage of workers and essentially free schooling many recently graduated high schoolers are turning to the skilled trades for employment opportunities. Vancouver is undoubtedly encouraging young residents to pursue a career in the trades, but at what risk do these tradesmen and women run putting their eggs in the construction basket? Steve Carter of commercial-landscaping.ca said: “My business is heavily dependent on new commercial buildings being constructed each year to keep my landscape construction employees busy. I understand that it’s a fine line between development and scarcity which must be walked, especially here in Vancouver”.
Vancouver and it’s surrounding cities continue to burst at the seams with growth. This means a plethora of new development projects aimed to increase density and provide a home for the growing population, many of whom are moving here from China. Density continues to rise yet the issue of infrastructure continues to choke the lively hood of residents.
Cities like Coquitlam and Port Moody are about to see a new SkyTrain line go live, which should help to alleviate some traffic woes, but due to the Metro Vancouver Area’s proximity to mountains and the ocean, unique challenges are created with regards to infrastructure. For example, Port Moody has seen significant growth in recent years, which has posed a number of challenges, specifically with traffic. Condos continue to pop up to accommodate the influx of residents, yet the evolution of roads and transit has been slow to follow. Vancouver’s landscape does not lend itself to an easily resolved solution to cut down on commuter’s struggles.
The BC government has recently implemented taxes on foreign investors to help control the inflated prices of houses. The results of this tax have had far greater implications than initially anticipated. Real Estate boards have been downplaying the role with which foreign investment plays in the overall market of Vancouver and the surrounding Greater Vancouver Area for quite a while now; however, recently data has shown that up to 14% of sales which are attributed to foreign buyers could be present in some cities. This is not an insignificant number, if this foreign buyers tax scares off a large portion of the potential buying population British Columbia could see a large slowdown in the red-hot market.
In addition to foreign investment taxes, Vancouver has recently voted to approve a vacant home tax. This tax would target homeowners who chose to have their house vacant despite a meager .6% vacancy rate in Vancouver. Mayor Gregor Robertson has referred to the situation as “frustrating and discouraging to see Vancouver’s rental housing crisis impacting people of all incomes and neighborhoods.” With a large portion of these vacant home owners being from abroad, it is yet another mark against Vancouver from a soley investment point of view.
If the city were to continue to see a significant downturn in housing prosperity, one of the biggest blue chip economies could take a significant turn for the worst resulting in massive layoffs to the extensive housing industry.
Although generally, a slowdown in the housing market is viewed as a negative, Vancouver is in a fairly unique position. The general public’s ability to purchase a house is nearly unobtainable due to the extreme prices furthermore, finding a place to rent is virtually impossible. A slight correction in the market’s inflated pricing is what many are quietly hoping for; however, with the potential downturn in the pricing, a depression in the market could also stifle construction projects. As the economy is so dependent on construction there is a very fine line regarding cooling housing prices and putting thousands out of work.
The complex issue of foreign investment in Vancouver has been contested and argued for years here in Vancouver. Most agree there has been a mismanagement of how the issue has been handled in previous decades.
Vancouver is undeniably one of the nicest cities in the world, particularly the landscape. Because of the high cost of living and low average wage it is definitely not the most livable. That being said, demand to become a Vancouver homeowner is higher than ever. Many residents are feeling the squeeze financially as they watch the housing market climb, rental availability drop and a market trying to keep up with demand. The laidback west coast lifestyle is quickly turning into a city filled with people working harder than ever with the attempt to make ends meat. Vancouver housing prices are bound to drop. Whether the market crashes or corrects is yet to be seen, regardless, action needed to be taken to manage the rising cost of living.