What's New

November, 2007

As a member of the Victoria Real Estate Board's "Government Liaison Committee" (currently accredited to monitor the Township of Esquimalt), I am provided monthly with an extremely interesting economic report vis a vis housing in Canada called "Altus Clayton Housing Report" published by www.altusgroup.com in Toronto. I would like to share some ideas raised in their reports of August and September, 2007.

HOUSING AFFORDABILITY – Lessons from the UK (August 2007 edition):

• Management policies that are put into place to address environmental issues can impact house prices and homeownership affordability
• Altus Clayton firmly believe that environmental issues are important
• But experiences with green-belts and stringent planning (notably London, England which has had a greenbelt for 50 years) five them some cause for concern
• Altus Clayton believes that good public policy should take into consideration all aspects of an issue including economic and social consequences of plans or actions which are implemented
• Altus Clayton advocates that "The more restrictive land use policies – the worse housing affordability – and the larger the divide between housing "haves" and "have nots"
• They suggest that restrictions on land supply cannot help but inflate housing prices over time
• The median house price in London is 8.3 times median household income
• London, Vancouver and Victoria markets are classified as "severely unaffordable" and Calgary and Toronto are classified as "seriously unaffordable"
• In Altus Clayton's estimation unless Vancouver and Victoria makes ALR lands available for development house prices will remain elevated
• Calgary, on the other hand, is expected to experience improved affordability as it has large tracts of land available
• The main point that I gleaned from this report is that "…..most people have not made the equation that soaring unaffordability is related to land-use regulations".

2001-2006 BANNER PERIOD FOR OWNER HOUSEHOLD GROWTH (September, 2007 edition):

• In 1976, 40% of Canada’s household were renters, that has now been reduced to 31.6%
• Ownership amount those under 25 has risen 5.2% to reach 21% - the fastest growing segment in all age groups
• The census has indicated that 42% of ownership growth was in ownership of apartments, up considerably from the previous 5 year period

Housing starts in Canada were considerably up in August, 2007 from the previous month (according to CMHC) – British Columbia being strengthened by activity in the Vancouver area.

How did the Victoria market fare on resale housing during August, 2007?

• Sales were up 22% from August, 2006
• Inventory (5 months of inventory of resale product is considered a "normal" market): In August, 2007 we had 3.2 months of inventory and during August, 2006 we had 4.0 months of inventory which translates into a brisk market indeed!