For many years now housing prices in Vancouver have been moving up at a very fast pace — so fast that most of us have been priced right out of the market. Economists will forever debate the causes of this phenomenon. However, it would appear that at long last relief finally may be here.
Provincial and local governments have taken a number of steps to dampen the red-hot housing market, including the foreign home-buyers tax, taxing empty homes, and a property speculation tax (although that last one got watered down).
Now the Real Estate Board of Greater Vancouver has released August statistics. For the second month in a row, prices for detached homes, townhouses and condos have fallen in Metro Vancouver. And it’s not just prices that are falling — the number of sales fell as well in August, adding to this past April’s benchmark, which saw the lowest number of home sales in April in 17 years.
It’s still too early to say with any certainty that we may look back at this summer of 2018 as the turning point in housing prices in Vancouver. But fingers crossed that the correction continues, allowing more and more of us back into the housing market.
We have a long way to go before housing prices return to the realistic levels they were historically. Up until about a decade ago housing prices were much more aligned with people’s incomes. Government must still do a lot more to ensure that correction trends continue, bringing prices back into balance with local incomes over the long-term.
For instance, a capital gains tax due upon the sale of residential properties might be a policy governments should consider. It would mean that individuals can no longer realize enormous unearned windfalls upon the sale of their residential properties. The tax revenue generated could be earmarked for non-market housing, such as co-ops.
In many European cities like Vienna, where 6 out of 10 residents live in subsidized or municipal housing, non-market housing makes up the majority of the housing stock. This gives everyone, especially young couples and people starting out in life, a real opportunity to obtain housing — something still so desperately needed in Metro Vancouver.