In Tania Kohut’s report for GlobalNews.ca
, British Columbia Real Estate Association chief economist Cameron Muir said that sustained demand is spurring builders into action, with a record number of residences now under construction in Vancouver.
“The lag between getting that signal in the marketplace — supplies get drawn down. It takes a number of years for all these housing units to be completed, to be added into the marketplace,” Muir stated. “In between that, we tend to see rising prices. So we get this ramp up in prices and then a plateau.”
William Strange, Professor of Business Economics at the University of Toronto’s Rotman School of Management, noted that city and provincial authorities are best positioned to address the supply gridlock that has afflicted the Vancouver market.
“[The] government does make it a bit harder by regulating supply strictly, and probably needs to find ways to reduce it at least in some parts of the city,” Strange explained. “This is a competitive market. It’s partly us doing this to ourselves, getting carried away in our enthusiasm.”
Strange added that Canadians will continue to migrate to the largest cities—and thus inflaming these markets even further—unless other regions see a level of development that would allow them to offer competitive jobs and economic environments.
“Handling the scale at which Canada has changed is a challenge. And we’re going to need to be at the top of our game to address it,” he said.
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Increasingly limited supply is continuously fanning the flames of intense competition and unchecked price growth in Vancouver’s residential real estate market, but a prominent expert argued that the city is poised for some relief in the next few years due to an ongoing boom in the construction sector.