Opinion: High Vancouver property prices can be your friend

A single-family home in Kitsilano, with the downtown Vancouver skyline in the background. (Shutterstock)

Written for Daily Hive Urbanized by Alistair Vigier, who is the CEO of ClearwayLaw.com, which is an online legal marketplace that connects the public with lawyers, and a platform for rating Canadian lawyers. He also enjoys writing about Vancouver real estate and environmental issues.

High property prices in Vancouver, or any other city, can be a sign of a strong and thriving economy and real estate market. They may indicate that there is strong demand for housing in the area and that people are willing to pay a premium to live there. There is massive demand to live in Vancouver.

However, high property prices can also have negative impacts. They can make it difficult for people to afford to buy a home, especially for first-time buyers or those with lower incomes. It can even be challenging for high-net-worth people on low incomes to get a mortgage.

This can lead to housing insecurity and contribute to income inequality. High property prices can also make it difficult for businesses to afford commercial space, which can lead to a lack of diversity in the types of businesses in an area and potentially limit economic opportunities for residents.

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Overall, the impact of high property prices depends on the specific context and the policies in place to address the potential negative impacts.

The rising cost of housing is a concern for many people, but it is important to consider the benefits that come with increasing home prices. One of the main advantages of rising home prices is that it can lead to increased economic growth and development. When home prices go up, it often means that there is a strong demand for housing in an area, which can lead to more construction and development. This can create jobs and stimulate the local economy.

Another benefit of rising home prices is that it can lead to increased property values for homeowners. When the value of a home increases, homeowners may be able to sell their property for a higher price or they may be able to use the equity in their home to borrow money for other purposes, assuming they also have a high income. This can provide financial security and stability for homeowners, particularly for those who have owned their home for a long time and have built up a significant amount of equity.

Increased revenue for local governments

Increased home values can also lead to increased revenue for local governments through property taxes. As the value of homes in a community goes up, so do the property taxes that homeowners pay. This can provide additional funding for schools, public services, and infrastructure projects, which can benefit all members of the community.

In addition to the economic benefits, rising home prices can also lead to an increase in the quality of life in a community. When there is a strong demand for housing, developers are more likely to build new high-quality homes and communities. These new developments can bring in new businesses, schools, and other amenities that can improve the overall quality of life in an area.

Of course, it is important to ensure that rising home prices don’t lead to unaffordable housing for some members of the community. Governments and stakeholders can work together to address this issue by implementing policies and programs that promote affordable housing options, such as rent control and incentives for developers to build affordable units, normally by offering tax rebates to developers.

Overall, rising home prices can bring many benefits to both individual homeowners and the broader community. While it is important to address any potential negative impacts, it is also crucial to recognize the advantages that come with increasing home values. By working together, we can ensure that everyone can share in the benefits of a thriving housing market and have access to the beautiful nature that Vancouver provides.

Low-income people might never be able to afford to buy in Vancouver

The rising cost of housing and mortgage rates has made it difficult for many in Vancouver to afford a home. People are listing their homes for sale far less than they were last year, which makes sense considering mortgage rates have more than doubled and home prices remain elevated. The mortgage qualify rules (stress test) also remain unchanged in Canada. This situation has led to a decrease in both supply and demand for homes.

Many Canadians expect mortgage rates to greatly rise and home prices to moderately decline, which can cause both homebuyers and home-sellers to hesitate. Affordability constraints can also curtail mortgage demand, while homeowners with lower mortgage rates may be hesitant to list their property and potentially take on a higher mortgage rate when they buy a new property.

It is important to consider the potential impact of rising housing costs on the broader economy. When homes are unaffordable for many people, it can lead to a decrease in construction and development, which can in turn lead to a slowdown in job growth and economic development. Governments and stakeholders must work together to find solutions to this issue, such as promoting affordable housing options and implementing policies that help to increase the supply of housing.

By addressing the challenges of rising housing costs, we can ensure that everyone can benefit from a strong and thriving housing market in Vancouver.

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