Anne McMullin: Housing fundamentals are strong
September 29, 2020
In Nanaimo, ground has broken on what will soon be 120 units of affordable housing. In East Vancouver, seniors are now enjoying The Link, a recently completed low cost rental building. And first-time homebuyers in Port Moody have the chance to own one of 117 modern, new homes being offered with low down payments.
All of this activity represents progress. While so much has changed in recent months due to COVID-19, one thing has continued: home building.
When the economy was shutting down this spring, the home building industry was declared essential and important projects continued in communities across British Columbia. Women and men on work sites around the province adopted new health and safety protocols but they never put down their hammers.
For all of us, this has been a year unlike any other we have experienced. But through all the uncertainty when so many people and industries are struggling, there is a comfort in driving past a construction site knowing workers are employed, communities are being built and the economic engine continues to run.
This spring, when the pandemic arrived, all of us initially hit the pause button as we absorbed the magnitude of what was happening. But I have been heartened to see important projects continue, including the creation of affordable rental units, homes geared to seniors and increased incentives for young, first-time home buyers.
While sales of new homes and condominiums dropped initially this spring, we have seen record sales activity this summer. More homes were sold in July in Canada than any other month on record. In Greater Vancouver, residential sales were 22 per cent higher than the same month last year, far exceeding the 10-year average.
We have also seen an increasing availability of rental suites, particularly in downtown Vancouver, and new home projects coming on stream.
In part, some of the activity can be attributed to pent-up demand following months of lockdown. But there are also other factors at play.
The pandemic may have delivered us a new-found importance of home, whether it is the lack of daily commute, a desire for more outdoor space or the need for more room for a home office. Our COVID world is changing where we live and the way we live.
All of this represents consumer confidence in our industry and province.
Photo by Darryl Dyck /The Canadian Press
I am often asked to predict the future. People ask me: Should I buy? Should I sell? Will interest rates remain low? What’s going to happen with the markets?
With so much uncertainty, no one can possibly have all the answers. But it is worthwhile looking at the fundamentals.
British Columbia remains a beautiful and desirable place to live and work and that won’t change. In addition, interest rates are at historic lows where they are likely to remain for the foreseeable future. And while our borders are closed to travel, it should be noted that immigration continues to increase B.C.’s population. In the first six months of 2020, Canada welcomed more than 100,000 new immigrants.
So my advice is this, whether being offered to a homebuyer, seller, renter or policy-maker: Stay the course. Proceed as normal knowing the market fundamentals remain strong and the long-term outlook is positive.
In the months ahead, we may see housing headwinds, political elections, new policy decisions and we will continue to cope with the health care crisis. But we can’t forget that before COVID-19 we were dealing with another crisis — the housing crisis. While it has been overshadowed, it hasn’t gone away. Symptoms of the housing crisis remain: high prices, low rental vacancy and too few homes.
As community builders, we have solutions and we are willing to work with communities and governments of all stripes. They include building a wider mix home options including micro suites, seniors’ living facilities and duplexes, triplexes and row homes for families. We need more homes near transit, more rental suites and we need speedier municipal approvals. Does it really have to take four or even five years before new homes can be realized?
The recent home projects we are seeing in Nanaimo, East Vancouver, Port Moody and beyond are a testament to the strength of our industry and the resiliency of our economy.
Anne McMullin is President and CEO of the Urban Development Institute, an association of the real estate and building industry.
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