Typically, when we see real estate values on the rise we assume that it’s good for the economy. Yet, that is not necessarily the case in British Columbia (a province in Canada if you are wondering what in the world is Osada is talking about?) where this rise in real estate costs does not coordinate with the income of its population. It has been estimated that in Vancouver real estate is currently over-valued by nearly 30%. What this means for locals is that housing which used to be affordable is no longer a viable option.
So what has led to this increase in housing costs? It is speculated that an increase in international purchases from wealthy elite in China as second and third homes has led to this increase. This has driven up the overall price of homes in the area. So just how much realty does China buy? You guessed it, nearly 30%. That means that for every $100 that is spent on housing in Vancouver, $30 of that came from Chinese investments.
This growing issue has yet to be truly addressed by the city who claims it is unable to accurately attribute these investments to foreign buyers. A survey was discussed as a potential option to getting a clearer picture of the mounting costs of homes in British Columbia, but no tangible steps have yet been taken to work towards rectifying the unaffordable housing cost for citizens. It’s possible that this has something to do with the interest of some homeowners who have seen a rise in their overall equity and development funded political parties.
Though it may be true that increasing the housing supply and overall housing value is a boost to the economy, it does not take into account the longer term effects it will have on Vancouver’s overall society. Higher housing costs without an increase in living wages will eventually lead to households having to choose between paying their rent or paying for their heat.