THE RENNIE OUTLOOK
MORE GROUND ORIENTED ADDITIONS, BUT FASTER APARTMENT GROWTH. On a structural-type basis, occupancy demand for apartment units is expected to grow more rapidly than that for ground oriented units (at 46% versus 43% between 2017 and 2041), driven by a growing millennial generation in the short-term and, over the longer-term, by the aging of the bulk of the post-War baby boom generation into the stage of the lifecycle where apartment rates rise once again. On average, future net additional housing demand is expected to be in the neighbourhood of 12,000 ground oriented units and 8,500 apartment units annually over the next 25 years. MORE AND FASTER GROWTH IN OWNER-OCCUPANCY. The outlook for rental is for an additional 146,000 units to be demanded over the coming two and a half decades years, or an average of about 6,100 units per year. This demand will largely be driven by growth of the younger generations—growth which itself will be driven by migration to the region. The pattern of falling maintainer rates for rental with increasing age will result in demand for owned units growing more rapidly than for rental homes in both absolute and relative terms. On the ownership side, demand for more than 350,000 additional units is expected over the coming 25 years, or about 14,700 annually to 2041. 03.3. HOUSING SUPPLY Having examined the demand side of the housing market to this point, we are now able to consider the supply side using data from Canada Mortgage and Housing Corporation’s (CMHC’s) New Housing Construction survey, which details housing starts and completions by structural type. The main strengths of this database lie in its comprehensive coverage, both in terms of the amount of time that CMHC has been collecting these data (which are available publicly back to 1990) and in terms of the frequency of the updates (monthly). Another important dimension that these supply-side data provides, in addition to identifying the number of newly-constructed units that are available each year to accommodate population growth and change (i.e. completions), is a glimpse into the magnitude of completions that can be expected in the coming years. This is done by translating housing starts on a dwelling type basis into future completions in the short- run. These, in turn, can be assessed against expected levels of demand.
DEMOLITIONS MATTER. Having said this, before the starts and completions data can be related to housing demand (either in a historical context or a future one), it is necessary to account for the number of dwelling units that are removed from the housing stock each year—that is, demolitions. As part of its online Databook, Metro Vancouver has made public
FIGURE 6
Short-term Housing Supply & Demand Outlook, Lower Mainland
Modeled Completions
28,000
24,000
Modeled Starts
20,000
16,000
Modeled Completions
the number of housing demolitions that have occurred annually back to 2007.
12,000
8,000
Occupancy Demand Increment
4,000
0
These data show that for every 1,000 housing starts in the Lower Mainland over the past decade there were roughly 164 residential demolitions, translating into a demolition
Projected
Actual
-4,000
JANUARY 2019 — P A G E 9
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