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The dynamic influence of changing demographics on Vancouver real estate

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GUEST SUBMISSION: In the vibrant city of Vancouver, where the breathtaking landscape meets a diverse and dynamic population, it is important to acknowledge the powerful force demographics contribute to shaping the real estate market landscape.

Factors such as changing demographics, generational shifts, affordability concerns and an aging population are fundamentally altering the real estate landscape.

Vancouver, like many metropolitan areas, is experiencing the rise of the younger generations, such as Millennials and Gen Z, who are quickly becoming a significant force in the real estate market.

Despite recent interest rate hikes, increased inflation and current economic uncertainty, a survey conducted by Mustel Group/Sotheby’s Internation Realty Canada determined housing demand among even these younger generations remains high.

Consequently, developers find themselves under mounting pressure to cater to the needs of Canadians while taking into account the preferences of the up-and-coming cohorts.

Unlike Baby Boomers, Millennials and Gen Z value housing options that are centrally located, close to transit and provide them with a live-work-play environment.

This increases the demand for innovative housing solutions such as micro-units, high-rise developments and even co-living spaces such as multi-generational homes.

The results of soaring prices

The surge in demand as more individuals seek entry into the housing market has led to escalating property prices in Vancouver and an ever-widening gap between incomes and housing costs.

With no current indication prices are expected to diminish any time soon, the prospect of homeownership has become increasingly discouraging to many Gen Z and Millennial individuals who are starting to save independently for an elusive goal.

The soaring property prices have resulted in an increase in renter households and a decline in homeownership, according to Statistics Canada.

With increased rental demand and a cry for affordable housing, developers in Vancouver are left with the challenging task of finding alternative housing options to accommodate the growing population and the diverse needs of different demographics.

Last year, British Columbia experienced a record-high net loss of interprovincial migration, with many individuals relocating to other provinces, typically Alberta, where property prices are comparatively lower.

Young Canadians, in particular, are searching for alternative solutions to home ownership due to the current housing crisis, such as renting, co-ownership, multi-generational living, tiny homes, or simply living with less square footage to afford their ideal locations.

Finding other more feasible options is only highlighting the gaps within the Vancouver market and creating more of a divide.

Impact of an aging population

Another crucial factor that demands our attention is the impact of an aging population on Vancouver’s real estate market.

As more people reach retirement age and choose to stay in their homes rather than downsize or move to retirement communities, the supply of available housing in the city becomes constrained.

This scarcity in supply contributes to rising housing prices and the demand for suitable properties exceeds the overall available inventory.

The limited supply triggers intensified competition among buyers, inevitably driving prices higher and creating a seller’s market.

This impacts all generations looking for houses, be they first-time homebuyers or families looking to upsize their homes.

These constraints, forcing pressures on the market in many different ways, lead to increased uncertainty that tends to result in properties being sold above the asking price, with bidding wars becoming the norm.

In light of this, it is imperative that we consider the needs and desires of those approaching retirement age and take proactive steps to encourage downsizing.

Introducing specialized developments that cater to diverse housing options for seniors or enhancing infrastructure and amenities in neighbourhoods with a higher concentration of seniors can make these areas more attractive to individuals as they transition into retirement.

The profound effect of demographic shifts

The interplay of these demographic shifts in Vancouver has a profound effect on the city’s real estate market, leading to a series of interconnecting factors.

As Vancouver’s population continues to surge and new generations enter the market, the demand for housing is outpacing the city’s supply. Limited supply within the industry is what sparks high levels of competition, resulting in higher property prices.

With a complex landscape that limits the areas available for development, developers are finding innovative approaches to address the evolving needs of Metro Vancouver residents.

Condos and multi-generational homes are an example of one option that has become increasingly popular over the past couple of decades as it provides a more affordable alternative to traditional single-family homes.

High-rise developments are rising in popularity as they are commonly built with energy-efficient features and sustainable design that is highly valued by Millennials and Gen Z.

By building vertically, more housing units can be accommodated on land that was once designated for a single-family home.

In conclusion, Vancouver’s real estate market is being shaped by a multitude of demographic shifts, including the rise of younger generations, affordability concerns and an aging population.

The preferences and needs of Millennials and Gen Z are influencing housing demands, pushing for innovative and centrally located housing options.

Furthermore, the aging population staying in their homes exacerbates the limited supply, escalating prices and intensifying competition.

The net result of these demographic shifts engenders a complex real estate landscape for Vancouver, compelling policymakers, developers and communities to collaborate on comprehensive strategies that prioritize housing affordability.

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Greater Toronto home sales jump in October after Bank of Canada rate cuts: board

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TORONTO – The Toronto Regional Real Estate Board says home sales in October surged as buyers continued moving off the sidelines amid lower interest rates.

The board said 6,658 homes changed hands last month in the Greater Toronto Area, up 44.4 per cent compared with 4,611 in the same month last year. Sales were up 14 per cent from September on a seasonally adjusted basis.

The average selling price was up 1.1 per cent compared with a year earlier at $1,135,215. The composite benchmark price, meant to represent the typical home, was down 3.3 per cent year-over-year.

“While we are still early in the Bank of Canada’s rate cutting cycle, it definitely does appear that an increasing number of buyers moved off the sidelines and back into the marketplace in October,” said TRREB president Jennifer Pearce in a news release.

“The positive affordability picture brought about by lower borrowing costs and relatively flat home prices prompted this improvement in market activity.”

The Bank of Canada has slashed its key interest rate four times since June, including a half-percentage point cut on Oct. 23. The rate now stands at 3.75 per cent, down from the high of five per cent that deterred many would-be buyers from the housing market.

New listings last month totalled 15,328, up 4.3 per cent from a year earlier.

In the City of Toronto, there were 2,509 sales last month, a 37.6 per cent jump from October 2023. Throughout the rest of the GTA, home sales rose 48.9 per cent to 4,149.

The sales uptick is encouraging, said Cameron Forbes, general manager and broker for Re/Max Realtron Realty Inc., who added the figures for October were stronger than he anticipated.

“I thought they’d be up for sure, but not necessarily that much,” said Forbes.

“Obviously, the 50 basis points was certainly a great move in the right direction. I just thought it would take more to get things going.”

He said it shows confidence in the market is returning faster than expected, especially among existing homeowners looking for a new property.

“The average consumer who’s employed and may have been able to get some increases in their wages over the last little bit to make up some ground with inflation, I think they’re confident, so they’re looking in the market.

“The conditions are nice because you’ve got a little more time, you’ve got more choice, you’ve got fewer other buyers to compete against.”

All property types saw more sales in October compared with a year ago throughout the GTA.

Townhouses led the surge with 56.8 per cent more sales, followed by detached homes at 46.6 per cent and semi-detached homes at 44 per cent. There were 33.4 per cent more condos that changed hands year-over-year.

“Market conditions did tighten in October, but there is still a lot of inventory and therefore choice for homebuyers,” said TRREB chief market analyst Jason Mercer.

“This choice will keep home price growth moderate over the next few months. However, as inventory is absorbed and home construction continues to lag population growth, selling price growth will accelerate, likely as we move through the spring of 2025.”

This report by The Canadian Press was first published Nov. 6, 2024.

The Canadian Press. All rights reserved.

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Homelessness: Tiny home village to open next week in Halifax suburb

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HALIFAX – A village of tiny homes is set to open next month in a Halifax suburb, the latest project by the provincial government to address homelessness.

Located in Lower Sackville, N.S., the tiny home community will house up to 34 people when the first 26 units open Nov. 4.

Another 35 people are scheduled to move in when construction on another 29 units should be complete in December, under a partnership between the province, the Halifax Regional Municipality, United Way Halifax, The Shaw Group and Dexter Construction.

The province invested $9.4 million to build the village and will contribute $935,000 annually for operating costs.

Residents have been chosen from a list of people experiencing homelessness maintained by the Affordable Housing Association of Nova Scotia.

They will pay rent that is tied to their income for a unit that is fully furnished with a private bathroom, shower and a kitchen equipped with a cooktop, small fridge and microwave.

The Atlantic Community Shelters Society will also provide support to residents, ranging from counselling and mental health supports to employment and educational services.

This report by The Canadian Press was first published Oct. 24, 2024.

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Here are some facts about British Columbia’s housing market

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Housing affordability is a key issue in the provincial election campaign in British Columbia, particularly in major centres.

Here are some statistics about housing in B.C. from the Canada Mortgage and Housing Corporation’s 2024 Rental Market Report, issued in January, and the B.C. Real Estate Association’s August 2024 report.

Average residential home price in B.C.: $938,500

Average price in greater Vancouver (2024 year to date): $1,304,438

Average price in greater Victoria (2024 year to date): $979,103

Average price in the Okanagan (2024 year to date): $748,015

Average two-bedroom purpose-built rental in Vancouver: $2,181

Average two-bedroom purpose-built rental in Victoria: $1,839

Average two-bedroom purpose-built rental in Canada: $1,359

Rental vacancy rate in Vancouver: 0.9 per cent

How much more do new renters in Vancouver pay compared with renters who have occupied their home for at least a year: 27 per cent

This report by The Canadian Press was first published Oct. 17, 2024.

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