Lack of housing supply in Greater Vancouver poses challenges for market growth

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Real estate demand in Greater Vancouver is hot, even as the supply of active listings for November has dwindled dramatically to over 25-year lows. It’s a supply problem, says Kevin Skipworth, owner/broker and chief economist of Dexter Realty — and one which isn’t currently being addressed by municipal and provincial government policies that might increase the supply of the right type of new housing.

Sales numbers remain deceptively normal. By the end of November there were over 3,400 properties sold in Greater Vancouver, compared with 3,545 in October and up from 3,131 in November 2020. But active listings in November are down to 7,500 as compared to 11,716 in the market at this time last year. That’s lower than the previous November record of 8,700, set in 2003.

“If you want to come on the market now, you’ll have an abundance of buyers competing for your home,” says Skipworth. “But even motivated sellers are becoming hesitant to list if they have limited prospects for finding a property they want to buy. If you’re looking for a new detached home few get built, and there’s little good news from developers as the small supply of townhouses is being rapidly snapped up.”

The lack of available listings in areas such as Vancouver East, Richmond —  and even more so in Burnaby, New Westminster, Coquitlam and beyond to the east — is beginning to represent real challenges to growth and mobility. Pitt Meadows, with a population of 18,000 has only 39 active listings, while Port Coquitlam, with a population of more than 58,000 lists only 118.

The provincial government has announced it will introduce legislation in the spring that will offer buyers a “cooling off” period that will allow them to walk away from accepted offers — potentially with little or no financial consequences. Skipworth believes such legislation could further bog down markets by removing clarity as to whether a sale will move forward.

“Government attention to demand-side measures hasn’t increased the supply of the right type of housing that buyers are looking for,” he says. “Building more high-rise condominium towers doesn’t look like the answer other than for renters. But homes for the middle class are critically lacking. B.C. continues to be a preferred destination for people around the world. Unless zoning changes to allow construction of the type of homes buyer are seeking, we may see continued supply constraints into 2022 and beyond.”

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This story was created by Content Works, Postmedia’s commercial content division, on behalf of Dexter Realty.