CMHC report for Greater Victoria shows multi-family starts are up year-to-date over last year (306 vs 238) but single detached housing starts are down 28% (105 vs 147). This is only for the months of January and February but it’s worth close monitoring as land costs rise and availability decreases. In 2000, single detached housing represented 75% of Toronto’s new homes. By 2017, single detached were only 18% due to increasing regulations and costs on development including regulations limiting land supply. Treating housing as a source of revenue by governments while reducing land supply is a recipe for the high prices presently experienced. Improving land availability & avoiding burdensome regulations are critical to Greater Victoria avoiding a similar path to Toronto. We could start with amalgamating 13 small municipalities and creating one enforceable regional plan for the CRD.
Other challenges include rising interest rates, more costly mortgage rules, introduction of expensive & unnecessary Step Code, and BC’s new taxes on out-of-province homebuyers, pensioners, and foreign buyers.
It’s worth noting, from 2003 to 2005, housing prices increased 41% after a period of stagnation. Nobody blamed out-of-province Canadians, pensioners or foreign buyers. Historically, prices jump after economic stagnation, experienced again from 2009 – 2015. These new taxes may start another period of economic decline, which in turn reduces employment and tax revenue. Reports are already coming in that homebuilding contracts from out-of-province Canadians are being cancelled and the tax hasn’t yet been put into place. Rather than focus on increasing supply, it seems the BC govt’s strategy for dealing with high demand is to gouge the customers and discourage them from buying.