A new report has told us what industry insiders already knew ? that the issue of home vacancies in Vancouver has been massively overblown. But why?
Joannah Connolly
Other
It’s one of Vancouver’s most popular public perceptions about the local real estate market – the belief that the high number of homes being left vacant is a key factor in the rise of home prices in the city.
So it was no surprise that the local media this week, including REW.ca/News, were all over the announced outcome of a new City-commission study into the true extent of home vacancies. It’s not the first time such a report has been done, but it’s a comprehensive study and it certainly adds robust data to the existing information.
For anyone who missed the story, the report found that home vacancies in Vancouver in 2014 (the study period) stood at 4.8 per cent – which is actually slightly down from the 4.9 per cent in 2002. The vast majority of vacancies were in condo-apartment units, of which 7.2 per cent were vacant, compared with just 1 per cent of single-family homes across the city (1.4 per cent on the West Side). REW.ca’s story explains further the various breakdowns by neighbourhood, so have a read of that here.
Our reaction at REW.ca? “Well, duh.”
The results of the study come as absolutely no surprise to yours truly, or anyone inside the real estate and development industry. Previous studies have already told us that vacancy rates in Vancouver are typical for any city, and we all know that there are much more obvious reasons for Vancouver’s rising home prices.
The results are a very far cry from public’s commonly held misconception that there are swathes of abandoned houses being left to decay across the city, all owned by selfish (probably foreign) investors not bothering to put the homes in the rental pool, caring only about the land value appreciation. Now, I’m not saying that never happens – of course, it does – but this is rare in relation to the overall market.
So, if this picture is not accurate, why do so many believe it to be true? Well, sensationalized mainstream media headlines such as this one and this one (to pick just two of many) don’t help. Nor do popular blogs such as Beautiful Empty Homes of Vancouver. Such coverage tends to focus on a tiny aspect of the market without putting it into the context of the bigger picture, which is misleading to the public, who have no way of knowing any better. After all, mainstream media is the most trusted voice around, and they’ve got the biggest loudspeaker. So if their stories suggest that foreign buyers leaving homes vacant are pushing up prices, why wouldn’t the public believe them?
But the other reason is something that I’ve been gradually learning in my role as editor-in-chief of Glacier Media’s real estate publications. It’s that, whenever there is a perceived problem, people want someone to blame for it. I’ve been asked many times on TV and radio, “Who is to blame for Vancouver’s high prices?” I’ve attended sessions entitled, “How can we fix the market?” People always want to believe the worst, and it always has to be somebody’s, or something’s, fault.
But it’s also a vocal minority that is doing the complaining, and the (often racially biased) finger-pointing. This group has a big loudspeaker, too. Whereas the rest of the people – many of whom have benefitted enormously from the rise in real estate prices – don’t get represented in the debate.
I guarantee you that if Vancouver’s real estate market “problem” was “fixed” and property prices were to come down, things would be no different. There would be a whole new set of problems, a different group of highly vocal, disgruntled residents, and a whole new round of finger-pointing and blame-laying.
That being the case, how can we help with affordability, which is still a very real issue for some people? Well, we do know that while the percentage of vacant homes may be small and stable, the number of total empty homes has increased, simply because of the rise in the total number of homes in the city (again, mostly condos). So, although vacancies are not to blame for rising prices, there’s nothing to say that we can’t find a way to tax those properties that are not contributing to the economy or the rental pool. The team at UBC Sauder School of Business has come up with a robust proposal for this (one that is not racially biased), and you can find out more about that here.
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