As we approach the upcoming provincial budget, we can expect there will be a lot of talk about housing again, but what matters are the actions.
So far, the actions we’ve seen are centered around reducing home prices – but what about making sure there’s enough homes for our growing population?
Supply and demand is a basic economic principle, but any conversation around building more homes seems to be met with instant skepticism and derision.
There’s no doubt: more needs to be done to ensure the dream of buying your first home becomes a reality for more British Columbians.
As a lawyer practicing real estate law, I regularly see the joy of young couples when they buy their first home, but I also see the frustration of those trying to enter the market.
In the last few years, there’s been more frustration than joy. We need to fix that – but the question is how.
Measures like the speculation tax, increased stress tests and higher interest rates have certainly had an impact; in the last six months we’ve seen home prices come down and the market slow.
Now a stable market is important. The out-of-control bidding leading many buyers to make offers with no subjects isn’t helpful to first-time buyers or the market.
But here lies the problem: continuing to bring prices down will inevitably turn the cool in the market to a chill. That means risking every job related to the construction industry –the very people we need to be making life easier for.
With a growing population, we can’t effectively reduce demand. So, the real answers lie in dealing with supply. Numerous reports and studies have shown, the added costs buyers pay are because of building permit delays, lack of supply, and limited densification.
A Bloomberg study last June showed a new home in Vancouver that costs $654,000 to build, costs an extra $644,000 in regulations – almost doubling the price.
Affordable rental space is nearly impossible to find, and this can’t be fixed with a speculation tax dealing with roughly 30,000 units across BC – most of which are vacation homes that don’t do anything for renters.
Clearly, what we need to actually make a difference is for government to cut those regulations that are inflating prices, speed up permitting and finally move past NIMBYism.
That’s what will actually help those left out of the market. Let’s see if it happens.
Puneet Sandhar is a lawyer and managing partner of Sanghera Sandhar Law Group based in Surrey and practices in the area of Real Estate Law and Land Development. She has and continues to serve on boards for numerous organizations including the Surrey Homeless and Housing Society, the Legal Services Society of BC, City of Surrey Board of Variance. She was awarded the Queens Diamond Jubilee Medal in 2012 for her volunteerism and work in the community.
