Bob Ransford
Sun
My crystal ball is shining with the prospect of a continued buoyant year ahead for local real estate markets. It is all because of the direct connection between real estate and the job creation spawned by increased construction.
Obviously, a boom in real estate markets this last year has had an impact across the economy and it looks like it will continue.
Typically, as the year comes to a conclusion and people turn their thoughts to Christmas shopping and family gatherings, the real estate market tends to slow down. But this year’s market statistics continue to show strength right down to the holiday season.
More than 7,700 homes worth more than $2.6 billion were sold in the province on the Multiple Listing Service (MLS) in November. That represents a 34 per cent increase in dollar volume and a 15.1 per cent spike in the number of units sold compared to the same month last year.
This past year has been a record-setting year for real estate in B.C. Total dollar volume of sales year-to-date province wide until the end of November topped a previous record at $33.2 million. Close to 4,200 more homes were sold this year to date than last year.
It is estimated that for every home sold, an additional $27,873 is spent on things like taxes, legal fees, moving expenses, new furniture and appliances.
In fact, it seems as though real estate and construction are the main drivers behind an economic revival the likes of which we haven’t seen for a decade or more.
All of this real estate activity creates the demand for construction and construction leads to job creation, which in the circle of things, creates more economic activity.
The unemployment rate in our province in November dropped to its lowest level since 1976, the first year in which statistics were available.
Job creation has been strong in both the construction sector and the service sector where much of that extra $27,873 is spent every time a house trades hands.
The next year holds out the promise of even more job creation if you look at many of the Olympic-related mega projects that have yet to break ground or are just mobilizing crews now. Workers will be going at top speed over the next year to make a serious dent in the Vancouver Convention Centre project, the Southeast False Creek Olympic Village, the Richmond Olympic Speed-Skating Oval and the RAV rapid transit project.
At the same time, a number of private-sector projects, like the new Fairmont Hotel, the Woodwards project and the many new residential projects in places like Richmond, Burnaby, Coquitlam and New Westminster, will start up during the next year and a half or so, adding to the demand for workers in the construction sector.
This work will continue on beyond the next year and we’re likely to see continued strong job growth through 2008, which means continued buoyant real estate markets for the next few years. My crystal ball is somewhat cloudy beyond the end of 2008.
At the same time, I see the next year as a bit of a transition year when it comes to the way we go about planning and designing new developments in these parts.
The recent civic elections resulted in some new politicians sitting in local positions of power not just in Vancouver but in many municipalities throughout the province. While most of these new local politicians can’t be labeled as anti-development, I believe a number of them are smarter-growth if not “Smart Growth” advocates.
The Smart Growth movement is North America wide with a local B.C. organization devoted to fiscally, socially and environmentally responsible land use and development that is aimed at avoiding urban sprawl, minimizing the use of cars by encouraging walking, bicycling and public transit, building with green technology and protecting farmland and ecologically sensitive areas.
A few developers have already embraced many smart growth and green building principles. Those who haven’t will likely be more strongly encouraged to do so over the next few years as they present their development plans to Councillors who understand and care about smarter growth.
So, all in all, a bright medium-term future is coming into view in my crystal ball. Happy New Year!
Bob Ransford is a public affairs consultant with COUNTERPOINT Communications Inc. He is a former real estate developer and a director of the Urban Development Institute — Pacific region. Email: [email protected]
© The Vancouver Sun 2005