The demand for housing in British Columbia is at its strongest since 2007, according to the B.C. Real Estate Association.

In its 2015 second quarter housing forecast, released Monday, the association says residential sales in B.C. are forecast to rise 2.4 per cent this year and 3.9 per cent in 2016.

Meanwhile, residential sales prices are also forecast to shoot up 4.5 per cent this year and another 2.4 per cent next year.

While the projections fall well short of a record-setting 2005 (when 106,300 sales were recorded), it represents the strongest housing demand in the province since 2007.

The forecast was released as housing affordability in Vancouver has dominated headlines and public debate.

Also on Monday, Insights West released a new poll showing 73 per cent of British Columbians support an “Absentee Homeowner Tax” for people who acquire residential properties but don’t live in them.

Last month, real estate marketer Bob Rennie and Vancouver Mayor Gregor Robertson both publicly supported the idea for a provincial speculation tax targeting investors who sell property shortly after acquiring it for a quick profit.

Approximately 500 people attended a #donthave1million affordable housing rally at the Vancouver Art Gallery on May 24.

http://metronews.ca/news/vancouver/1384385/b-c-housing-demand-highest-since-2007-real-estate-association/

Nelson Rockefeller’s grandchildren probably don’t live in single-family detached homes in Manhattan. Neither will your kids live in such housing in Vancouver.

That message was delivered recently by condo king Bob Rennie, of Rennie Marketing Systems. He conveyed the notion that the world has moved on, that cities change, and that younger generations are adjusting their expectations, in a speech to the Urban Development Institute,

The fact is that Vancouver has been outed as a great hedge city, according to a recent article in the Harvard International Review. It argued that rich people, particularly from China and Russia, countries pairing capitalist economies with unpredictable authoritarian political systems, regard Vancouver as one of just a handful of cities that are safe, secure places to invest.

The article, written by Jessica Dorfmann, reports that “whole neighbourhoods are under construction” in Vancouver, and asks: “How long can Vancouver sustain these levels of growth and investment?

“And what will a sudden crisis in Beijing mean for Vancouver?”

The article observes that all the new investment has caused “an affordability crisis for what should be the next generation of local property owners.”

And there is no relief in sight because, while “hedge cities can hope for the best, in a truly globalized real estate market, their fates are out of their hands.”

That brings us back to Rennie, who is advocating a tax to curb real estate speculation, which would do nothing to address Vancouver’s problems as a hedge city. Foreigners invest their money here, in housing, for the longer term.

It also would not address property demand expected to continue from the thousands who move here annually.

Rennie acknowledges there is only one effective way to address lack of affordability: more density, much more. Not just on arterial streets but on quiet avenues.

Rennie is preparing us for the inevitable decline and fall of the single-family home in Vancouver. Think woolly mammoth.

Detached homes, he says, are “on the verge of extinction.” It is already happening. Between 2006 and 2011, the city lost 900 single-family homes.

Just look at Cambie Street, or the legion of homeowners newly afflicted by the land assembly bug, banding together to sell whole blocks to developers who will seek rezoning to build townhouses and condos.

Rennie says Vancouver has about 47,000 single-family homes and a limited land base. New, detached properties are not being created.

On my Kitsilano street, over the past year, two single-family houses were bulldozed, replaced by large duplex developments accommodating four families where formerly there were two.

There are more cars on the street, more dogs and kids and backyard barbecues but not more affordability: the half duplexes sold for nearly $2 million each. One sold three hours after a for-sale sign was posted.

Perhaps if enough multi-family developments proliferate, affordability will ease. Certainly no one has found a better idea to facilitate it.

High density throughout Vancouver would make this city look more like Manhattan or Paris, where apartments are the norm, including for families, and detached homes are nowhere to be found.

It is worth noting that in those cities, affordability is also elusive. Try buying a 600-square-foot apartment in central Paris; see how far your money goes.

To achieve affordability, Parisian home buyers move to the suburbs. This is happening, too, in Vancouver. As Rennie told his audience, “Main is the new Granville St., Fraser is the new Oak.”

The good news: millennials in Vancouver, aged 19-35, do not have the same expectations as baby boomers. They don’t necessarily see themselves joining the white-picket fence crowd.

A poll cited by Rennie reveals 81 per cent of millennials in Surrey, Richmond, Vancouver and Burnaby believe Greater Vancouver is headed in the right direction. “They’re happy, and they’re a force, and we’d better start understanding them.”

byaffe@vancouversun.com

http://www.vancouversun.com/opinion/columnists/Barbara+Yaffe+Single+family+detached+homes+endangered/11100051/story.html

The realisation that something is grotesquely awry with Vancouver’s housing market has reached a tipping point.

Fuelled by the special sauce of Chinese wealth - and good old Fear of Missing Out - prices have decoupled from the local economy, with an average detached price of about C$1.4 million (HK$8.9 million). So far, so normal for Vancouver.

But the past couple of months have witnessed a kind of awakening.

Chinese-Canadian Eveline Xia - herself an immigrant - helped get the ball rolling with her very first tweet on March 18, in which the 29-year-old environmental scientist created the hashtag #donthave1million, and posted a plaintive cry about the drain of young Vancouverites being priced out of the city she loves. “To thrive, does @CityofVancouver not need people like you and me?” she asked.

It hit a nerve. Fellow millennials jumped on board #donthave1million, posting their own tales of real estate woe.

Eveline Xia's March 18 tweet that kicked off the hashtag #donthave1millionAround the same time, a petition sprang up on change.org, demanding that BC Premier Christy Clark and local mayors “restrict foreign investment in Greater Vancouver's residential real estate market”. The petition had about 24,000 supporters as of Wednesday.  

The various online and media rumblings will take solid form at a rally for affordable housing in downtown Vancouver on Sunday at noon.

Yet there are still pAnother #donthave1million tweet by a priced-out Vancouverite and her daughter.lenty of misunderstandings about the forces at play, on both sides of the debate.

One position states there’s nothing particularly unusual about Vancouver’s housing situation. Yet this 

He doesn't have a million either.neglects the fact that the city’s unaffordability is now globally exceptional, exceeded only by that of Hong Kong.

Foreign money might be a factor, concede some, but it must similarly influence other markets, right? Not really – since immigration data demonstrates that the influx of rich immigrants to Vancouver (80 per cent of them Chinese) is unmatched by any other city in the world, at least in terms of wealth-migration schemes that clearly define asset benchmarks.

Others seek to frame unaffordability as inevitable, since Vancouver is a city of limited land supply. But plenty of other cities are in the same boat: New York and Singapore spring to mind. Both are expensive cities, but Vancouver has left them in the dust in terms of unaffordability. If Vancouver (price/income ratio 10.6) could achieve the affordability of New York (6.1), or Singapore (5.0) I’m betting that Eveline Xia would be dancing down Main Street.

Surely Vancouver has always been unaffordable? A quick check of the stats will show that as recently at 10 years ago, Vancouver’s price/income ratio was in dancing territory, at 5.3.

As for the perennial low-rates argument, pretty much everywhere has low rates. It tells us nothing about what makes Vancouver’s market special.

An exceptional cause must be found for an exceptional situation, and for Vancouver, that can be found quite easily in wealth migration, which exploded in the past decade.

Vancouverites still struggle to grasp the scale of this influx to their modestly-sized city. From 2005-2012, about 45,000 millionaire migrants arrived in Vancouver under just two wealth-determined schemes, the now-defunct Immigrant Investor Programme and the still-running Quebec Immigrant Investor Programme. Let’s put that in perspective. The entire United States only accepted 9,450 wealth migration applications in the same period under its famous EB-5 scheme, likely representing fewer than 30,000 individuals.

So, Vancouver has recently received more wealth-determined migration than any other city in the world, by a long stretch. This, in a city with some of the lowest incomes in Canada.

The flipside to these various misunderstandings is the current focus on Australian-style restrictions on foreign ownership (Canada doesn’t even bother to track foreign ownership, let alone restrict it). Such restrictions might be an admirable goal, but I very much doubt they would have great downward impact on Vancouver prices.

That’s because I have not encountered a single real estate purchase in Vancouver that would have definitely been proscribed by restricting “foreign” ownership. Not one. The concept of the foreign investor dominating Vancouver’s market may indeed be a myth, since “foreign” buyers typically have residency rights or dual citizenship in Canada, or are able to make their purchase via a suitably endowed proxy (ie: a spouse or child with residency).

Foreign buyers probably aren’t to blame for Vancouver’s unaffordability. But foreign money probably is. And cracking down on the foreignness of funds will prove much harder than dealing with the foreignness of buyers, even if the will to do so exists.

Another factor often neglected is that a successful “fix” for unaffordability would crush a great many people, probably as many as it helps. In peril would be a real estate and development industry that employs thousands. Anyone who already owns a home would also be at risk. Thousands of elders banking on their homes as a retirement nest egg. Thousands of recent buyers facing the terrifying prospect of negative equity, with mortgages far exceeding the value of their homes.

It’s no surprise the politicians are treading carefully.

Yet it would be a mistake to weigh the issue in cold terms of winners and losers, cost and benefit - because it is a fundamental matter of fairness. Is it fair that so many people have been so vastly enriched, through no great credit of their own, at the expense of so many who have been impoverished, ruined, or simply forced out of their city, through no great fault of their own? The dividing line isn’t one of intelligence, or diligence, or any other worthiness – mainly, it’s a demarcation of age, between those who were old enough to have bought before the wildest market rises, and those who were not.

Wherever you stand on the matter, the time for denialism is over. At the very least, Vancouver deserves its long-overdue debate about the root causes of the unaffordability crisis, and what to do about it.

*

The Hongcouver blog is devoted to the hybrid culture of its namesake cities: Hong Kong and Vancouver. All story ideas and comments are welcome. Connect with me by email ian.young@scmp.com or on Twitter, @ianjamesyoung70 .