Greater Vancouver’s home price gains during the pandemic have lagged behind most other Canadian jurisdictions as well as those in the United States, in stark contrast with the region’s unprecedented increases in the mid-2010s, when the provincial government intervened on foreign demand.
“It’s a different ballgame,” said Tom Davidoff, associate professor and director of the Centre for Urban Economics and Real Estate at the University of British Columbia. “This is enhanced affordability for locals pushing up prices, as opposed to diminished affordability for locals, full stop, due to outside pressure.”
This time around, local residents – seen as the primary driver of the housing boom – have been able to access a greater pool of money with their relatively stagnant wages due to lower interest rates and more accessible bank credit. Adding to the housing froth has been heightened demand for suburban properties with more living space due to the COVID-19 pandemic, Davidoff says.
But these factors are being witnessed across North America.
Canada’s home prices have jumped 17.3%, whereas Greater Vancouver’s have risen just 6.8% between February 2020 and February 2021, according to the Canadian Real Estate Association. U.S. house prices rose 10.8% from December 2019 to December 2020, according to the Federal Housing Finance Agency (FHFA) House Price Index.
Despite the continental surge, some Vancouver-based media commentary has asked, “Where is the outrage?” now, in comparison with the significant political pressure applied on the B.C. government in 2017, when housing prices rose 48.5% over the prior three years, according to the Real Estate Board of Greater Vancouver (REBGV).
Then, foreign ownership – and money derived from foreign earnings – was perceived as a unique factor further disassociating local incomes (residents) from local housing prices in Vancouver.
Now, foreign purchases are down significantly in B.C. and immigration has vanished.
“The outrage was, you know, people who want to get into the market can’t, and renters are paying more. This time, it’s different, because the reason prices have escalated, in part, is because of enhanced affordability through the mortgage market,” said Davidoff.
“So instead of another group crowding out local demand, which was part of what was happening in 2016 – you know, how much of a part is controversial – but now, it’s pretty clear, it’s that people have more ability to pay,” he added.
People have more ability to pay because Bank of Canada (BOC) interest rates are at an all-time low of 0.25%. Furthermore, BOC is buying government bonds (debt) from financial institutions, allowing them to lend more freely and at historically low interest rates.
This process, called quantitative easing, “encourages households and businesses to borrow, spend and invest,” states BOC. “For example: We can buy five-year government bonds, which will lower their yield. This would be reflected in lower interest rates on five-year fixed-rate mortgages, making it cheaper to borrow to buy a house.”
The BOC has indicated low rates are here for the near term, at least until 2023.
Davidoff elaborated that suburban housing markets, such as in the Fraser Valley, have typically been cheaper as people factor in higher transportation costs. But buyers appear to be betting that working from home could become permanent.
“I think it’s true that the virus has made people want more space. Out in the suburbs, there’s more space, which is what you want. And the issue of transportation has been diminished,” said Davidoff.
Urban planner Andy Yan says outrage over housing still exists but “it’s a different type of outrage if you’re totally locked out of ownership, as opposed to moving on up.”
Yan, director of Simon Fraser University’s City Program, suggests people are leaving their condos and paying more for the suburbs.
Although Vancouver’s overall price change is 6.8%, detached homes are up 13.7%, townhouses are up 7.2% and apartments are up only 2.5%, according to the REBGV. However, the Fraser Valley Real Estate Board reports 25.3% price gains in all housing forms since February 2020.
“I think there is outrage. But it just depends on who you are,” said Yan, who has been criticized for his 2015 report suggesting overseas Chinese buyers fuelled the remarkable 2014-17 gains.
“My point wasn’t only just foreign money. But it was foreign money with cheap money, right? Now we have a scenario where cheap money completely takes over the environment,” said Yan.
Another difference between then and now, said Davidoff, is how rents have remained the same in Vancouver, due, in part, to government intervention (rent freezes through to December 2021). And so, a significant population is not faced with higher housing costs during the pandemic.
Yan said it is those renters who likely have had their incomes “vaporized” due to the pandemic.
“If you look at the core of unaffordability, it’s both very high housing prices with relatively low, very, very low paying jobs,” said Yan.
Both Yan and Davidoff suggest housing prices are now at a level of risk not seen before, should interest rates rise and transportation demands return to the pre-pandemic era.
The total proportion of Metro Vancouver residential properties owned by non-residents in 2018 reached 4.9% while “some non-resident participation” in properties amounted to 7.6%, according to the Canadian Mortgage and Housing Corporation (CMHC). International students who file an income tax return are considered residents by CMHC. Last year, the CMHC reported these figures have remained the same.
B.C. introduced a foreign homebuyers tax in August 2016 and a so-called “speculation and vacancy tax” in 2018. Stricter mortgage requirements (“stress tests”) were also applied then by the CMHC, leading to house prices dropping in Vancouver in 2019.
Cracking down on potential crime and tax avoidance/evasion has also been an issue in Vancouver real estate. The B.C. government is conducting a public inquiry into money laundering that is to look at the regulatory regime in real estate. And between 2015 and 2020, a special Canada Revenue Agency audit program has issued $729.1 million of tax reassessments linked to Greater Vancouver real estate.
MONTREAL – Two Quebec real estate brokers are facing fines and years-long suspensions for submitting bogus offers on homes to drive up prices during the COVID-19 pandemic.
Christine Girouard has been suspended for 14 years and her business partner, Jonathan Dauphinais-Fortin, has been suspended for nine years after Quebec’s authority of real estate brokerage found they used fake bids to get buyers to raise their offers.
Girouard is a well-known broker who previously starred on a Quebec reality show that follows top real estate agents in the province.
She is facing a fine of $50,000, while Dauphinais-Fortin has been fined $10,000.
The two brokers were suspended in May 2023 after La Presse published an article about their practices.
One buyer ended up paying $40,000 more than his initial offer in 2022 after Girouard and Dauphinais-Fortin concocted a second bid on the house he wanted to buy.
This report by The Canadian Press was first published Sept. 11, 2024.
MONTREAL – The Quebec Professional Association of Real Estate Brokers says Montreal-area home sales rose 9.3 per cent in August compared with the same month last year, with levels slightly higher than the historical average for this time of year.
The association says home sales in the region totalled 2,991 for the month, up from 2,737 in August 2023.
The median price for all housing types was up year-over-year, led by a six per cent increase for the price of a plex at $763,000 last month.
The median price for a single-family home rose 5.2 per cent to $590,000 and the median price for a condominium rose 4.4 per cent to $407,100.
QPAREB market analysis director Charles Brant says the strength of the Montreal resale market contrasts with declines in many other Canadian cities struggling with higher levels of household debt, lower savings and diminishing purchasing power.
Active listings for August jumped 18 per cent compared with a year earlier to 17,200, while new listings rose 1.7 per cent to 4,840.
This report by The Canadian Press was first published Sept. 6, 2024.
In the quest to find cities where renters can enjoy the best of all worlds, a recent study analyzed 24 metrics across three key categories—Housing & Economy, Quality of Life, and Community. The study ranked the 100 largest cities in Canada to determine which ones offer the most to their renters.
Here are the top 10 cities that emerged as the best for renters in 2024:
St. John’s, NL
St. John’s, Newfoundland and Labrador, stand out as the top city for renters in Canada for 2024. Known for its vibrant cultural scene, stunning natural beauty, and welcoming community, St. John’s offers an exceptional quality of life. The city boasts affordable housing, a robust economy, and low unemployment rates, making it an attractive option for those seeking a balanced and enriching living experience. Its rich history, picturesque harbour, and dynamic arts scene further enhance its appeal, ensuring that renters can enjoy both comfort and excitement in this charming coastal city.
Sherbrooke, QC
Sherbrooke, Quebec, emerges as a leading city for renters in Canada for 2024, offering a blend of affordability and quality of life. Nestled in the heart of the Eastern Townships, Sherbrooke is known for its picturesque landscapes, vibrant cultural scene, and strong community spirit. The city provides affordable rental options, low living costs, and a thriving local economy, making it an ideal destination for those seeking both comfort and economic stability. With its rich history, numerous parks, and dynamic arts and education sectors, Sherbrooke presents an inviting environment for renters looking for a well-rounded lifestyle.
Québec City, QC
Québec City, the capital of Quebec, stands out as a premier destination for renters in Canada for 2024. Known for its rich history, stunning architecture, and vibrant cultural heritage, this city offers an exceptional quality of life. Renters benefit from affordable housing, excellent public services, and a robust economy. The city’s charming streets, historic sites, and diverse culinary scene provide a unique living experience. With top-notch education institutions, numerous parks, and a strong sense of community, Québec City is an ideal choice for those seeking a dynamic and fulfilling lifestyle.
Trois-Rivières, QC
Trois-Rivières, nestled between Montreal and Quebec City, emerges as a top choice for renters in Canada. This historic city, known for its picturesque riverside views and rich cultural scene, offers an appealing blend of affordability and quality of life. Renters in Trois-Rivières enjoy reasonable housing costs, a low unemployment rate, and a vibrant community atmosphere. The city’s well-preserved historic sites, bustling arts community, and excellent educational institutions make it an attractive destination for those seeking a balanced and enriching lifestyle.
Saguenay, QC
Saguenay, located in the stunning Saguenay–Lac-Saint-Jean region of Quebec, is a prime destination for renters seeking affordable living amidst breathtaking natural beauty. Known for its picturesque fjords and vibrant cultural scene, Saguenay offers residents a high quality of life with lower housing costs compared to major urban centers. The city boasts a strong sense of community, excellent recreational opportunities, and a growing economy. For those looking to combine affordability with a rich cultural and natural environment, Saguenay stands out as an ideal choice.
Granby, QC
Granby, nestled in the heart of Quebec’s Eastern Townships, offers renters a delightful blend of small-town charm and ample opportunities. Known for its beautiful parks, vibrant cultural scene, and family-friendly environment, Granby provides an exceptional quality of life. The city’s affordable housing market and strong sense of community make it an attractive option for those seeking a peaceful yet dynamic place to live. With its renowned zoo, bustling downtown, and numerous outdoor activities, Granby is a hidden gem that caters to a diverse range of lifestyles.
Fredericton, NB
Fredericton, the capital city of New Brunswick, offers renters a harmonious blend of historical charm and modern amenities. Known for its vibrant arts scene, beautiful riverfront, and welcoming community, Fredericton provides an excellent quality of life. The city boasts affordable housing options, scenic parks, and a strong educational presence with institutions like the University of New Brunswick. Its rich cultural heritage, coupled with a thriving local economy, makes Fredericton an attractive destination for those seeking a balanced and fulfilling lifestyle.
Saint John, NB
Saint John, New Brunswick’s largest city, is a coastal gem known for its stunning waterfront and rich heritage. Nestled on the Bay of Fundy, it offers renters an affordable cost of living with a unique blend of historic architecture and modern conveniences. The city’s vibrant uptown area is bustling with shops, restaurants, and cultural attractions, while its scenic parks and outdoor spaces provide ample opportunities for recreation. Saint John’s strong sense of community and economic growth make it an inviting place for those looking to enjoy both urban and natural beauty.
Saint-Hyacinthe, QC
Saint-Hyacinthe, located in the Montérégie region of Quebec, is a vibrant city known for its strong agricultural roots and innovative spirit. Often referred to as the “Agricultural Technopolis,” it is home to numerous research centers and educational institutions. Renters in Saint-Hyacinthe benefit from a high quality of life with access to excellent local amenities, including parks, cultural events, and a thriving local food scene. The city’s affordable housing and close-knit community atmosphere make it an attractive option for those seeking a balanced and enriching lifestyle.
Lévis, QC
Lévis, located on the southern shore of the St. Lawrence River across from Quebec City, offers a unique blend of historical charm and modern conveniences. Known for its picturesque views and well-preserved heritage sites, Lévis is a city where history meets contemporary living. Residents enjoy a high quality of life with excellent public services, green spaces, and cultural activities. The city’s affordable housing options and strong sense of community make it a desirable place for renters looking for both tranquility and easy access to urban amenities.
This category looked at factors such as average rent, housing costs, rental availability, and unemployment rates. Québec stood out with 10 cities ranking at the top, demonstrating strong economic stability and affordable housing options, which are critical for renters looking for cost-effective living conditions.
Québec again led the pack in this category, with five cities in the top 10. Ontario followed closely with three cities. British Columbia excelled in walkability, with four cities achieving the highest walk scores, while Caledon topped the list for its extensive green spaces. These factors contribute significantly to the overall quality of life, making these cities attractive for renters.
Victoria, BC, emerged as the leader in this category due to its rich array of restaurants, museums, and educational institutions, offering a vibrant community life. St. John’s, NL, and Vancouver, BC, also ranked highly. Québec City, QC, and Lévis, QC, scored the highest in life satisfaction, reflecting a strong sense of community and well-being. Additionally, Saskatoon, SK, and Oshawa, ON, were noted for having residents with lower stress levels.
For a comprehensive view of the rankings and detailed interactive visuals, you can visit the full study by Point2Homes.
While no city can provide a perfect living experience for every renter, the cities highlighted in this study come remarkably close by excelling in key areas such as housing affordability, quality of life, and community engagement. These findings offer valuable insights for renters seeking the best places to live in Canada in 2024.
