Rich Coleman: Managing expectations, supply and demand key to Vancouver housing crisis

Housing Minister says young people need to have realistic expectations when entering the housing market

By The Early Edition, CBC News

Despite the increased calls for government intervention on rising house prices in Vancouver, the B.C. government has yet to step in with any policy.

Blame for the increasingly high costs of living in Vancouver has been passed around in recent weeks. Last month, Vancouver mayor Gregor Robertson said the federal government abandoned its commitment to affordable housing across the country.

Recently, a report by the B.C. Real Estate Association found density and Vancouver’s geography, not foreign buyers, are the reasons behind unabated increases to housing prices.

B.C’s minister responsible for housing, Rich Coleman says the province is looking for solutions. He spoke to the Early Edition’s Stephen Quinn.

According to the Real Estate Board of Greater Vancouver, the benchmark home price index for a detached house in the region was over a million dollars in April this year.  What can the province doing about this?

We recognize that home affordability can be challenging at times and the market has the tendency to have its bubbles and move up and down.

We’re going to look at things with regarding to building code, issues around development cost charges, and work with municipalities with regards to costs they’re putting onto housing.

As we do that, we have to make sure we’re not going to do something as a government that would force down the value of people’s assets that they work very hard to pay and devalue their equity.

We’ve seen house prices double and in some cases quadruple in the last 15 years. Why can’t that be controlled?

It depends on where you live. We can’t react to an issue on housing just based on one small portion of the market in Vancouver.

If you look at condominium and townhouse projects across the regions, there’s a number of areas where the costs are quite flat. The reason they’re flat is because of supply.

You get these bubbles where there’s a shortage of listings and people chase a home and they’ll actually outbid each other to buy it. In other areas of the Lower Mainland you could have a situation where people can buy at the asking price or below.

We hear constantly that young people who are employed can’t get into the housing market. What can be done for them?

Young people buying their first home get a break in the property transfer tax from the provincial government. The challenge is what you want in the marketplace and what is your want as a first time purchase.

You’re not always going to be able to start on a single family home on a 7000-square-foot lot unless you’re going to go outside the city itself. That’s the choices people make.

For generations people have made these choices in Vancouver. You have to recognize that there’s a limited supply, particularly in the single family home.

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