In the last 7 years, there has been a major increase in renovation and construction in Vancouver, BC and when Wall Street was dealing with the sub-prime mortgage fiasco, Vancouverites generally didn't blink an eye. Some larger corporations were affected, and they laid off workforce that worked satellite out of Vancouver (some of these people are still looking for work) but generally the economy dialed up in VanCity. Everyone is still renovating, and they're always doing the kitchen first. But it's not all roses, sunshine (HA!), and unicorns in this bubble of a Rainy City and the grass may be green in the coldest of months, but it's has me wondering if it is greener.
Mayor Gregor has made his promises to become the Green City Capital. He also wants to change major traffic routes, increase public transportation funding, and reward urban density and sustainable developments. We've recently been granted Laneway Housing, which basically means you can tear down your garage and build a smaller slab-on-grade home. But the Millennium Water (Athletes Village) has been plagued with construction problems and the city had to downgrade their credit rating and fund the additional $150Mil in budget shortfall. For those who don't know, Vancouver proper has no where to go but up - just like Manhattan - and there are very few vacant lots or character homes to purchase. This all formulates to a building frenzy and as an Interior Designer in this special market, I can't help but wonder what happens after the post-Olympic exodus.
We still have no real plan for dealing with the poorest postal code in North America and their mental health issues (the great plan was to shut down Riverview Hospital, but that dumped everyone into the Downtown Eastside), minimum wage is $8/hr ($15,360/yr) and our cost of living in Vancouver is ever increasing, a 475 square foot 1 Bedroom apartment rents for $1,700 (3.75:1), and the average 1 Bedroom Condominium sells for $375K and in Toronto it's $200K with more square-footage. So you can't help but wonder, doesn't this seem like things are really out of balance and the bubble will burst?
"[T]he victory may be short-lived, with experts predicting the bubble will pop when the harmonized sales tax kicks in on July 1." writes Raphael Alexander for the Vancouver Sun (February 22, 2010) "Homebuyers will likely advance their demand for houses before the HST is implemented, meaning fewer purchases in late 2010 and early 2011."
But Paul Jenkins, Senior Deputy Governor for the Bank of Canada, has a different opinion. "I would certainly not say we are looking at a housing bubble," says Jenkins (Mordant, Reuters, February 22, 2010)
I thought I needed to look at some more concrete economic data and remembered that I sat thru a presentation by Bernie Magnan, Chief Economist at the Vancouver Board of Trade, about a month back, and he's predicting a reasonable GDP increase over 2010, especially in construction and lumber. The Economist ranks Vancouver the most livable city in the world. It appears that rental vacancies will be going up after the Olympics as a migrant workforce returns home so it looks like they will level off, but real estate sales are increasing steadily. I have a good source in the rental placement industry, and landlords are scrambling this month without monthly tenacy rate reductions. For example, $1,050 for a 450 square foot 1 Bedroom apartment or $5,995 for a 3Bedroom penthouse seem a bit on the steep side for what you're really getting.
So there may be a vacuum in Vancouver (VAN-cuum, HA!), but I guess there's really only one conclusion, kitchen and bath sales can only go up from here. So I say, let's pimp those kitchens and bathrooms like there's no tomorrow!