To understand rising home prices, a review of economic and population growth is necessary.
Significant leaps in home prices are often preceded by several years of stagnation.
From 1995 to 2000, single detached home prices in Greater Victoria stagnated due to a poor economy and slow population growth.
As economic conditions improved and population increased, there was a 41% jump in home prices from 2003 to 2005.
Clearly, we had double-digit price increases more than ten years ago, yet nobody called for a speculation tax on vacation and retirement homes.
In 2008/09, a global meltdown again caused stagnation, and in 2013 we had the third lowest single detached starts in 40 years.
As economic and population growth improved, home prices leaped 24% from 2014 to 2016.
Recent census data reveal rising home prices are a symptom of housing supply unable to keep pace with growth.
According to the 2011 census, Greater Victoria had a population of 344,615 and 167,229 dwellings.
In 2016, there were 367,770 people and 172,559 dwellings. The population increased 6.7% but housing grew only 3.1%, less than half of what was required.
In 2019, our population is 382,085, a rise of 10.9% since 2011. A record number of starts over the past two years have boosted housing to about 183,627 or 9.8% since 2011.
This supply has not resulted in lower prices because we’ve been playing catch up and now we’re barely keeping pace with population growth
Elected officials should recognize that housing must at least match growth or better to achieve a measure of affordability.
They can best assist this by rezoning for higher density, improving permit processes, and avoiding unnecessary fees, taxes and regulations.