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Residential price drop failing to ease Vancouver’s housing crisis

By Peter Mitham for Business in Vancouver

Prices will double

Ten consecutive months of declines in the Real Estate Board of Greater Vancouver’s benchmark home price have brought the figure down 7.5% since last May to $1,011,200. Sales are also down, with March seeing the lowest tally in 33 years. On the bright side, this was the smallest monthly decline of the year, and the strongest month for sales since October, when the board reported 1,966 transactions.

The future holds even brighter times, Central 1 Credit Union chief economist Helmut Pastrick told the Vancouver Real Estate Forum on April 4.

“Prices will double between 2016 and 2041,” he said. “And it wouldn’t surprise me if that’s on the low side.”

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The reason is simple: the region’s population is increasing, and densification is the name of the game in the Lower Mainland as developers try to build more homes for more people. Throw in the effect of increased regulation and rising construction costs, from materials to labour, and there’s only one direction for prices to go: up.

Not government’s job

Rising prices mean scant hope of an end to the region’s affordability crisis, but as a recent presentation to the Urban Development Institute (UDI) noted, Metro Vancouver isn’t special.

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