Vancouver’s real estate market is the hottest in the country, but the Vancouver Board of Trade (VBOT) is predicting that the price of Vancouver real estate will eventually fall.
“Real estate has been in a bubble for a number of years and that’s the biggest bubble we’ve ever seen,” Vancouver Mayor Gregor Robertson said Wednesday at the Vancouver Real Estate Board’s (VREB) annual conference in Vancouver.
“We have a real estate bubble.”
Robertson said the BC government has spent more than $200 million on housing programs, but “it’s just not working.”
“I think the realtor in Vancouver has had enough of the housing market.”
Robertson told the audience that while the city is a global city with high prices, “we are a city of choice, and I don’t think that’s what Vancouver is about.”
The Vancouver Board says that Vancouver is “in a bubble,” and it wants to see the city “more livable, more accessible and more affordable.”
Robertson’s comments come after the Vancouver Tax Foundation released its 2017 housing affordability report, which found that, in 2016, Vancouver’s housing market was “not sustainable,” with the average price of a house in the city rising by only 8.9 per cent from 2016 to 2017.
According to the VREB, “housing affordability is currently an issue for Vancouverites, but not necessarily a problem for everyone.”
“The real estate sector continues to have the lowest affordability rate in Canada, with a median price of $1.27 million in 2017.
“In the long run, that’s going to make people less willing to pay for their home. “
The reality is that real estate is unaffordable to people with modest incomes,” said VREABC chief economist Richard Laxer.
“In the long run, that’s going to make people less willing to pay for their home.
So the affordability issue, that is a real issue.”
Robertson added that the B.I.O. will also likely impose new tax measures, including a 10 per cent sales tax, to help fund housing and infrastructure.
“If we can’t get rid of this bubble, we’re going to have to find some other way to get people to buy their homes, and it is going to be a very hard process,” he said.
The VREBC expects that the real estate industry will grow by 20 per cent over the next five years, with growth rates of 50 per cent to 60 per cent, but it warned that the market will be “disrupted by the introduction of a new tax.”
Robertson did not provide a specific timeline for when this would occur, but he did say that he wants to “build on the momentum” from last year’s report.
“I believe we will have a very positive outcome in Vancouver,” he added.