Tuesday, 23 August 2011

Real Estate in Vancouver: A Local Obsession

Two months have now passed since I landed in Vancouver and what has struck me most is the local obsession with house prices.  And this is not just because I have been hanging around with real estate agents and urban planners!  One only needs to pick up a local newspaper or turn on the television news to witness the continuous stream of stories on house prices.  Yesterday's Vancouver Sun was typical in that it led with a new survey reporting how the city's housing market is in 'dangerous territory' (see here).  In many other cities this story could act as a major warning, but in Vancouver this type of story appears as often in the newspaper as the weather forecast.  In the short time I have been in Vancouver, I have been amazed at how locals have fetishized real estate.

First, the obvious.  House prices are incredibly high in Vancouver and show no sign of changing.  This article reports on how the average house in Vancouver is priced at 11.2 times the median family income, a ratio far in excess of other Canadian cities.   


The high cost of housing in Vancouver stems from a number of factors, including: land supply; influx of overseas capital; the creation of a resort-style city; the type of development product being promoted; and planning regulations.  But I don't want to focus on the reasons for the high prices, and instead focus on why Vancouverites cannot stop talking about it.  London has similarly high house prices compared to average incomes, but from my experience it figures less in the everyday conversation.  Do people in London just accept the situation and move on?  Do Londoners have better things to talk about, like the weather?  Soccer?  Riots?  (ok, they also apply to Vancouver).

I can identify two reasons why the topic of house prices is so much to the fore in Vancouver.  Firstly, house prices are unreasonably high and it is a legitimate concern for youngsters and families looking to get onto the housing ladder.  Many people believe that the only way to afford property is to move further out the city.  Yet, this brings anxieties related to increased commuting and a disconnection from the urban amenities that many young people have grown used to.  This then shapes the local conversation and media discourse.  However, this is no different to many other cities and is not exclusive to Vancouver.

It is therefore more important to look at the characteristics of the local and provincial economy.  While Vancouver has historically been dominated by logging and other exports moving through the seaport, it is now real estate that largely shapes the economy.  As Vancouverism has developed into a brand of urbanism, the real estate sector has capitalised on this to place a premium on living in the 'Liveable City'.  This is not to deny other economic sectors operating in the city (e.g. tourism, film, minerals etc), but the city is noticeable for a lack of HQs or a sizeable financial sector.  Into this void has stepped real estate, whereby local people are more informed from either working in the sector or having greater exposure to it. 

Finding a solution to this obsession is no easy task.  The reasons for the high prices need tackling, and that is wide-ranging strategy which requires coordination from numerous city departments as well as a recognition of wider (and more macro) economic issues which cannot be directly shaped by city policy.  But a greater diversification of the local and regional economy would dilute the dominance of real estate and prove that real estate speculation is not the only industry that a city exists for.  And if all that fails?  Perhaps go back to talking about the weather.


  1. Your graph is too small to read!

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  3. The reasons for high prices need to intervene, and is a broad strategy, which requires the coordination of the various municipal offices, and the recognition of a broader economic.

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