Join Matt and Adam for their discussion with Adrien Byrne, an Australian-Canadian with a keen interest in real estate who brings a unique perspective to the discussion surrounding the Vancouver market.
Adrien compares our market to the market in Sydney, arguing that a key difference in the perceived affordability of the two markets is the average income level of each city’s residents.
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About Adrien and the Urban Development Institutes:
Adrien is Australian, and he started working as a town planner at the Sydney local government. He worked with developers’ applications and reviewed plans to see how the natural resource aspect of the assessment process would be affected (for instance, how a development would impact koala bears). Following this, he was a policy advisor for the Urban Development Institute of Australia (UDIA): the industry body representing greenfield development in New South Wales. He worked on policy issues, like the planning system to build more supply, and strata reform. In 2010, he was looking at purchasing a property in Sydney but got cold feet and wanted a lifestyle change. So, he immigrated to Vancouver and started with the Urban Development Institute (UDI) there in media relations and communications.
The UDI in Vancouver and UDIA in Sydney are similar, but the UDIA represents greenfield developers and in Vancouver there is more infill development. Both face similar issues on affordability, taxes, low supply, and planning regulations.
Greenfield refers to developing new areas without existing infrastructure, such as sewer, water, transit, etc. Generally, this type of development is on the outskirts of a city.
Infill refers to developing underutilized land, such as a parking lot downtown where a mixed-use tower can be built. Roads and sewers are already in place. There are less environmental and infrastructure constraints than with greenfield development.
On the similarities between Sydney and Vancouver:
They are both top-tier cities. The quality of life in Vancouver is up there with Sydney, Melbourne, and Scandinavian cities. Geographically, Sydney is constrained like Vancouver: it has national parks to the north and south and mountains to the west, and it’s on the Pacific Ocean. Both cities have lots of immigration and are the gateway to their country from the Pacific, with large port areas. Sydney is closer to Toronto as the country’s financial centre, but in terms of liveability it is more like Vancouver.
On the disparity in salaries:
The minimum wage in BC is $10.85, which is about $1,627 per month. When you need to buy food, clothes, and transportation, there is not a lot of money left to pay rent. In Sydney, the minimum wage is $18.29, which is about $1,000 more per month and so people have more money left for rent. There is so much focus in Vancouver about the supply and demand issue, but not a lot on the wage issue. It seems common that salaries are much lower among many professions in Vancouver as compared to Sydney and places like Melbourne and Auckland, for instance. Vancouver lacks the competitive edge that large financial centres like Sydney and Toronto have. However, technology is growing in Vancouver—this is a high-paying industry for the area, but it’s still less competitive with other tech centres like San Francisco.
On housing costs in Sydney:
Renting a one-bedroom in Vancouver costs just over $2,000 per month. A basic one-bedroom in Sydney is $2,600 and for higher-end it’s over $3,000.
In terms of buying, Sydney’s Bondi Beach can be compared to Kitsilano Beach in Vancouver. A two-bedroom in Kits on Cornwall St., built in 1974, goes for $768,000. On Bondi Beach (a 15-minute drive from the central business district), you would not find anything less than $1.2 million. In the vicinity of that suburb, most two-bedroom 1974 apartments go from $1.2-2 million. Prices have been trending upwards for a long time, which is driven by immigration and demand for the city—this likely isn’t stopping.
On if the same type of trends in Sydney will continue in Vancouver in the next 5-15 years:
Vancouver is a miniature Sydney, like what it was population-wise 20 years ago. Increasing minimum wage to $15, as in the NDP’s platform, is a good start. As the city grows, salaries will increase, but Vancouver is already well behind other global cities. Prices will increase at the same time.
On if Sydney is still largely unaffordable to people:
It certainly is. There are fixed costs of living that don’t change between cities like Sydney, Auckland, London, and Vancouver (such as food, transportation, and entertainment).
On whether Sydney’s policies to battle unaffordability and the politics of them are like Vancouver’s:
They’re completely different. Planning and approvals are done on a municipal basis in Vancouver, whereas in New South Wales (which Sydney is the capital of) this is done by the state’s planning department. Municipalities are held accountable to ensure they’re building enough supply and moving housing targets. We don’t have this in Vancouver, and it’s what is slowing supply in the region.
On Sydney’s permit process and ease of getting large developments through:
Sydney and its surrounding municipalities identify plans for transit corridors and pre-zoning and submit them to the state government for approval. If targets are not high enough, they’re directed to amend the plans. This pre-zoning process would be the longest holdup, just as the re-zoning process is the longest holdup in Vancouver (it can take 5-8 years) and stalls planning and supply. New South Wales has legislation whereby land is pre-zoned by the city and if you’re building a house that meets specific criteria, you can have a private certifier approve your plans and building can start within a couple of weeks. This is equivalent to the development process in Vancouver, which takes 8-10 months.
On supply, demand and affordability, lessons from Sydney:
This comes back to the higher salaries in Sydney—the capacity to buy and compete with other buyers is greater than in Vancouver. Sydney also gets 100,000 new immigrants per year, versus about 30,000-35,000 in Vancouver. There is more supply coming on, but Sydney’s population of nearly 6,000,000 is more significant than Vancouver’s. Infrastructure adds costs to new housing as well.
On the xenophobia and anti-immigration comments in the media surrounding Vancouver’s foreign buyers’ tax and if Australia has this issue:
This seemed largely centered on buyers from mainland China. In Australia, there are policies to protect buyers from the local market. This generally applies to luxury properties that are already built—they need federal government and foreign investment review board approval. There are similar sentiments, but it’s more pronounced in Vancouver.
On the process with the foreign investment review board:
With their agent, foreign buyers submit paperwork. The board wants to know how they’re funding the property and where the money is coming from. It’s uncommon that approvals don’t go through (this is similar to Vancouver’s FINTRAC process).
On who the off-shore buyers are in Australia:
There are many English, Irish, Canadian, Chinese, and Japanese people, but they’re from all over the world.
On if there are rental housing issues in Sydney like there are in Vancouver:
It’s not a crisis and rents are higher, but the capacity to pay rents is higher. Inclusionary zoning has been around for a long time in Sydney’s planning. This is a dis-incentive for developers to invest in a particular type of product. Capital can go to other nearby areas like Burnaby or Coquitlam, for instance. The market often leads to a lesser amount of rental supply.
On real estate auctions and transparency in Australia:
Auctions occur in popular areas like Sydney, where there’s high demand. They’re a lot of fun, and the bidding process is very transparent. A seller sets a minimum price, the auction is advertised, and there is a professional auctioneer. Buyers can come unsupported or with an agent. The seller will have their agent to help organize the auction. It’s at the house and they might have a barbecue or gathering beforehand. It’s competitive and can be stressful for buyers, but you get the best market price. Knowledge of this market price is missing in multiple offer situations, where the transparency of other potential buyers isn’t there.
Community amenity contributions are transparent in places like Burnaby and Coquitlam. But how does the City of Vancouver negotiate in private with a developer and reach conclusions? What effect does that have on the approval of a project? This is a problem, it’s not transparent or accountable to Vancouverites. Adrien doesn’t see this issue in Sydney.
- Favorite area in Vancouver: Third Beach
- Favorite bar or restaurant: The Wicklow at Stamps Landing
- Downtown penthouse or west-side mansion: downtown penthouse
- Where you first bring out-of-town visitors: 49th Parallel coffee in Kits
- Trakkie-daks or budgie smugglers: budgie smugglers
To reach Adrien:
Search LinkedIn for Adrien Byrne Vancouver