• 14/06/2024

House price crisis in Vancouver shares parallels with Sydney, says Generation Squeeze organiser

ABC News – 14 July, 2015

By Bill Birtles


A grassroots movement tackling a housing affordability crisis in Vancouver has drawn comparisons with the housing situation in Sydney.

The average price of a freestanding home in Sydney is now closing in on $900,000 – the highest in Australia.

But that is relatively cheap compared to the Canadian harbour city of 2.3 million people, where the average price for a freestanding home reached almost AU$1.2 million in May.

The metro area of Vancouver has hit a record average sale price of AU$2.35 million.

The rapid rise in Vancouver’s property prices prompted local Everline Xia to start a twitter hashtag #donthaveonemillion, which went viral.

She told a Vancouver rally in June the city was facing a crisis, “at a pace that defies reason, defies the local economy”.

“The dream of affordable home ownership and affordable rental housing is slipping away from too many of us,” she said.

A lobby group representing people in their 20s, 30s and 40s, Generation Squeeze, has now sprung up, partly in response to the housing price problem.

“It really just started as a smallish Twitter campaign and it blew up because it really caught the imagination of young people here,” Iain Reeve, a Vancouver organiser for Generation Squeeze, said.

“I just don’t think there’s been a generation in Canada before where owning a home is not even something that can be realistically considered.”

Vancouver’s house prices started to rapidly increase in the 2000s, with its scenic harbour and hills, mild weather and ethnically diverse population making it an attractive destination.

In 2006 alone, prices increased by 20 per cent.

House price discussions lead to immigration questions

But Mr Reeve said wages and average earnings had not kept up with rising house prices.

“What a lot of people turn to when talking about it is the immigration question,” Mr Reeve said.

“Vancouver, British Columbia, Canada, like Australia, are really, really pro-immigration places.

“I’m very pro-immigration but I think that one of the things that’s come along with it is the immigrants that tend to come to Canada are relatively wealthy, relatively well-educated.

“And so it’s created a large influx of people with quite a bit of money who have the capacity to pay more to buy homes.”

Unlike Australia, which restricts foreign nationals to buying new property, rather than existing houses and units, Canada’s rules are more relaxed.

But a significant investor program to attract overseas money was scrapped everywhere except Quebec last year amid concerns investors, primarily from mainland China, were overheating the property market, particularly in Vancouver.

“If you combine people who came through that program under British Columbia law and people that came from other provinces and then moved to British Columbia, Vancouver has seen more millionaires immigrate to the city than all of America in the past 15 to 20 years,” Mr Reeve said.

Three years ago, Australia launched a significant investor visa with the lure of permanent residency in exchange for investing $5 million into approved sections of the economy.

In the first two years, more than 1,000 applications were received, with 90 per cent coming from mainland China.

Mr Reeve said stable, prosperous countries like Canada and Australia would be even more appealing to wealthy Chinese investors if the Shanghai stock market continued its recent volatility.

“If you have a lot of money in China, there’s a fear that something could go wrong, so it’s a safe investment to buy real estate in other countries,” he said.


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