With a huge, demographically-driven down-sizing of the kind of homes Canadians live in looming on the horizon, what’s the future for the home-building industry? That’s a sobering question, given the size of the industry and its impact on the B.C. economy, as well as the size of the looming shift as I chronicled in a post last week (accessible here). With baby boomers inclined to downsize as they head into retirement, over the next two decades the percentage of multiple-family units compared with single-family is likely to grow from just under half to more than two-thirds. What I didn’t look at is the impact this shift to much smaller homes will have on the people who build them for a living. As reported by Peter Simpson, CEO of the Greater Vancouver Homebuilders Association, in a Vancouver Sun column (accessible here) a couple of weeks ago, it will cost about $4.4 billion — $3.5 billion of it in wages to 70,000 workers — to build or renovate more than 16,000 new homes in B.C. this year. These numbers reflect a remarkable recovery of the market when you consider that at the height of the recession in 2009, the total tippled to just over 8,000 new homes. But with a high percentage of home buyers already maxed-out in terms of their ability to pay, with interest rates unlikely to remain at their current rock-bottom low over the medium- or long-term, and with the inexorable demographic shift just gearing up, I think it’s time for some serious discussion of — and planning for — the future of the housing business. Follow me on Twitter @DonCayo
VANCOUVER, B.C. – June 3, 2008 – The Greater Vancouver housing market continued its re-balance between sales and listings last month. The Real Estate Board of Greater Vancouver (REBGV) reports that residential property sales in Greater Vancouver declined 30.7 per cent in May 2008 to 3,002 from the 4,331 sales recorded in May 2007.
New listings for detached, attached and apartment properties increased 20.2 per cent to 7,390 in May 2008 compared to May 2007, when 6,149 new units were listed.
"With more property listings and a decline in the number of sales, prices are not increasing as rapidly, now down to single digits overall, which is good news from an affordability standpoint," said REBGV president, Dave Watt. "The housing market is at a balanced state, sellers have more competition and buyers have more selection to choose from."
Sales of detached properties in May 2008 declined 33.4 per cent to 1,203 from the 1,805 sales recorded during the same period in 2007. The benchmark price, as calculated by the MLSLink Housing Price Index®, for detached properties rose 8.4 per cent from May 2007 to $771,250.
Sales of apartment properties declined 30.5 per cent last month to 1,244, compared to 1,789 sales in May 2007. The benchmark price of an apartment property increased 8.7 per cent from May 2007 to $389,668.
Attached property sales in May 2008 decreased 24.7 per cent to 555, compared with the 737 sales in May 2007. The benchmark price of an attached unit increased 9 per cent between May 2007 and 2008 to $478,931.
Bright spots in Greater Vancouver in May 2008 compared to May 2007:
Coquitlam up 45.2 per cent (45 units sold from 31)
New Westminster up 13.6 per cent (100 units sold from 88)
The Real Estate industry is a key economic driver in British Columbia. In 2007, 38,050 homes changed hands in the Board's area generating $1.065 billion in spin-offs. Total dollar volume of residential sales set a new record at $22.25 billion and total dollar volume of all sales set a record at $22.77 billion. The Real Estate Board of Greater Vancouver is an association representing more than 9,500 REALTORS®. The Real Estate Board provides a variety of membership services, including the Multiple Listing Service®.