Ever-growing real estate prices in Vancouver have placed more and more homes out of reach of a significant fraction of the buying population, but the worst effects don’t stop there, according to an observer.
In an analysis for MoneySense, licensed realtor Romana King argued that the real estate frenzy had a significant impact on Vancouverites’ security and quality of life.
Most notable among these effects is the increased danger of losing deposit money on the part of the consumers. The issue is exacerbated by the mad rush to purchase among would-be home owners who fear missing out on the few almost-affordable properties left in the city.
“The biggest concern is that buyers have started to eliminate certain clauses that were once used to protect their own interests—such as choosing to waive the financing clause and the home inspection clause,” King wrote.
Another risk area is in rental, where much of the available units are investment condos by mostly foreign nationals. Overseas ownership has been cited by various quarters as a crucial factor driving Vancouver home prices way up.
“[The availability] would be good… considering how tight Vancouver’s rental markets are, but these urban condo rentals are just not affordable for most. This means finding an affordable rental unit can be virtually impossible, particularly if you’re a family with kids,” King explained.
The analyst also quoted a Vancity report that revealed significant increases in the cost of farmland—now ranging between $150,000 and $350,000—which can contribute to higher produce prices.
“While prices can drop for parcels of land greater than five acres, these price increases are setting off alarm bells, especially when paired with statistics from agricultural lender Farm Credit Canada that show that any land priced above $80,000 per acre makes farming unsustainable,” King said.
“Not only are the rising home prices having an impact on farmland prices, but the large tracts of actively farmed land within lower B.C. that produce some of country’s best produce are now controlled by non-farmers,” she added. “These non-farmers lease out the land to farmers operating in B.C.”
Are you looking to invest in property? If you like, we can get one of our mortgage experts to tell you exactly how much you can afford to borrow, which is the best mortgage for you or how much they could save you right now if you have an existing mortgage. Click here to get help choosing the best mortgage rate