The price of residential real estate in the City of Vancouver
continues to increase at a staggering rate. This is especially true
for single family homes; figures released by the Real Estate Board
of Greater Vancouver for February 2016 show a 27% year-over-year
increase for single detached home prices in Metro Vancouver.
Theories to explain the craziness of this market abound, with
pundits typically pointing to historically low interest rates, a
relatively small land base and the effect of foreign capital as all
hurting affordability. Other more unusual theories are
floating around, as well (for example, some blame profits from the
illegal sale of marijuana for increasing prices). Falling
somewhere between these typical and more outlandish theories is the
"vacancy theory", which posits that a vast number of
single family homes in Vancouver have been purchased solely as
investment properties and sit vacant, reducing the housing stock
and driving up prices.
The City of Vancouver released a report last month which should
finally lay to rest the vacancy theory, at least with respect to
single family homes, duplexes and row-housing units. By studying BC
Hydro smart meter data from 2002 to 2014, the City's consultant
was able to determine that the vacancy rate for single family,
duplex and row-housing units in the City between 2002 and 2014 was
just 1%. Accordingly, vacancy rates were very low and stable
during this period of skyrocketing prices.
Perhaps unsurprisingly, the report identified significantly
greater vacancy rates for condominium housing units (7.2% in 2014).
Local media seized on this when the report was published, noting
the problem of there being so many vacant condominiums at a time
when the residential rental vacancy rate is close to 0%.
Although this observation may resonate with many, the fact remains
that it seems quite unlikely that these vacancies are playing a
major role in driving up condominium prices. Between 2002 and
2014, condominium prices did not increase at anywhere close to the
rate of increase for single family home prices.
Russell v. Township of Georgian Bay provides a useful reminder of the fact that while municipal officials sometimes appear to hold all of the cards in disputes with home owners, that is not always the case.
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