residential
With the pipeline of new homes under construction shrinking, starts must pick up to accommodate our growing population. THE ISSUE OF ADEQUATE HOUSING SUPPLY REMAINS A KEY REGIONAL CHALLENGE
Coinciding with the heady rise in home prices into 2016, was an uptick in the number of new homes under construction—not a surprising development given that basic economic principles tell us that when the price of a thing increases the quantity supplied of that thing does, too. Of course, issues of housing supply generally—and housing supply in Metro Vancouver specifically, with its political overlay— cannot be fully understood using only those tools obtained from Econ 101. Regardless, housing stakeholders and relevant market participants together created conditions that supported an increased pipeline of new housing in 2016. Per the data, there was an average of 26,587 homes under construction at a given point in time in 2015, and only 23,941 in 2014. In comparison, there were 31,964 homes under
construction in 2016, 39,056 in 2017, and 42,328 in 2018. What these annual data don't reveal, however, is that the under-construction inventory peaked in Q2 2018, driven by the apartment segment which saw its inventory of units under construction fall in both Q3 and Q4. There is currently an array of challenges facing housing suppliers in the current market, from construction costs and labour scarcity to approvals delays, political uncertainty, and the broad normalization of market conditions. The trend in new housing supply will be an important one to monitor: “nimble” and “responsive” are two things supply is not, if and when it is needed in the short-term.
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