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Prices Decline, Rezonings Necessary to Maintain Supply

Issue 19-128 Price of New Housing

August 9, 2019

Relative to the same month of 2018, the cost of new housing in B.C.’s three largest cities continued to decline in June of 2019. Home builders in Victoria received 1.8% less for their projects, and Vancouver’s housing price index was down 1.2%. The decline in both metropolitan areas was due to decreases in new housing prices (-3.0% in Victoria and -2.3% in Vancouver) as both metropolitan areas saw relatively stable land values (+0.7% and +0.5%, respectively). A similar pattern was seen in Kelowna (-0.3% overall), where a slight rise in land value (+0.3%) was also offset by a decrease in the price of new houses (-0.6%).

Nationally, the new housing price index inched 0.2% lower during the twelve-month period ending in June.

Data Source: Statistics Canada

So while land, labour & materials increase, prices declining and most of that the expense of the builder. This explains why housing starts are declining and therefore supply. To ensure supply remains, rezonings are necessary for more affordable land to continue building. Otherwise supply dries up, and prices will again start rising. That is in the hands of the municipalities.

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