There is no greater demonstration of the difference between need and want than home ownership. We all need a home, but most of us want to own one (or even more than one).
In this real estate environment, Houston, as the saying goes, we have a problem.
There is a generation of people who feel they have no access to home ownership while still believing they are expected to strive for it. Some first-time home owners are entitled to a title.
This April, Greater Victoria real estate sales hit $1 Billion for the first time and the average home launched over the enviable (for sellers at least) million-dollar mark, to $1.18 Million. But don’t try complaining to friends in Vancouver about that. They’ll just laugh. In Metro Van residential sales were up 126 per cent. That’s double plus another quarter. Whistler and Squamish almost tripled (a 187 and 195 percentage increase respectively).
Younger, mostly urban, people feel they have no access to house ownership while still longing for it.
Canadian Real Estate Association and Statistics Canada data shows that national home prices are now seven times the average household income in our country—and in Vancouver this climbed to 12 times in 2016. Although this did dip for a bit due to new cooling measures, the pandemic has now created an unpredicted housing boom. For comparison, in the 1980s in Metro Van, it was only three to four times.
As we come out of the pandemic, a key learning for young people is that the universe doesn’t owe you anything. In fact, we can be doing everything right and we just get kicked to the ground. Older people like me knew this already.
I’m going to be a bit controversial here: it turns out that no one is entitled to have title to land or a house (except Indigenous people, but that’s another topic).
If various generations have somehow instilled in the next generation that owning a home anywhere we chose to live was a given (including our “hometowns” of Richmond, Vancouver, the North Shore) it was a mistake, and we owe them an apology. For many young people home ownership isn’t within their grasp; the opportunity feels impossible because it is.
And yet they were taught that home ownership was a step on the path to adulthood and success. Many thought they were expected to own a home and that they would.
A 2017, a Stats Can survey showed that home ownership in Metro Vancouver was only five per cent below the national average. But it wasn’t the lowest, and it wasn’t down that much over time: it was a mere 1.5 per cent lower in Metro Van from over a decade before in 2006. That’s means it’s been pretty stable for over 15 years. (Aside from price, this is may also be that people are doing more post-secondary, taking longer before they have earning power, plus some immigrant families have children living at home for longer).
Even if home ownership levels are stable that doesn’t mean it’s getting easier for locals to own: Vancouver is now a global city with people investing and buying homes from all around the world (hence the attempt by B.C. to use a Foreign Buyers Tax to cool the market—the BC Real Estate Association has found that this tax didn’t make homes more affordable).
There are things individuals can do and things society can do (if we want) to help make home ownership (or at least property investment) more accessible.
Consumers, especially young people, may need to be creative and find new approaches. Parents can’t (or don’t want to) loan the money? How about buying in with a roommate whose parents can. Buy a cheaper recreational property and rent it out except two weeks a year for your own holiday. Living farther away from the centre, in a smaller home, is a standard in any of the “global” cities that Vancouver likes to compare itself to (London, LA, New York, Hong Kong).
At the societal level we need to see more flexibility by municipalities in the permitting process to help deal with the supply side and get more product to market.
But in the end, we still need to understand that owning is not a right. It’s time to stop defining adulthood and success as home ownership, because in global cities, this just isn’t the case.
In Canada owning a home can continue to be an aspiration, but we need to admit that renting isn’t a failure and home ownership isn’t a given.
Vince Taylor is the owner of Pilothouse Real Estate, the second largest real estate sales and marketing company in Metro Vancouver. He is the author of Beyond the Blindfold: The Power of Context
SWIM ON:
- Rob Shaw: Within minutes, Victoria and Ottawa’s finance ministers flatly rejected two key recommendations from an expert panel to address housing affordability.
- In 2019, Andrey Pavlov argued that while the provincial government pats itself on the back, the numbers say we’re headed in the wrong direction on housing affordability.
- Last year, Maclean Kay noted the NDP promised 114,000 new rental or co-op homes in 10 years. Meeting the target will take a miracle – or miraculous bookkeeping.
