Most of the Lower Mainland and Fraser Valley experienced no growth or even a slight decline last month, except Abbotsford, where there was still a bit of growth, especially in the apartment and townhouse sector.
But that doesn’t return real estate to the affordability level for most families; it just cauterizes the hemorrhage.
As per usual, governmental policies had some unintended consequences. Putting the boots to the high-end properties meant that the well-heeled (many foreign) investors who were using real estate strictly as an investment vehicle, saw an end to their “can’t lose” high-priced investments.
“If single family homes have gotten out of reach of the average citizen who simply wants a property for their family,” they reasoned, “those people will be forced into the townhome and condo market. This will put upward pressure on that market. I think I should move my money there.”
They were right. So, investors dove into that market, too, further feeding price escalation in townhomes and condos. Because the land itself is not a part of a strata-property purchase, escalation of their prices usually lags that of free-hold properties, not only in timing but also in total percentage gain.
But not with this added incentive. Anyone who has gone shopping for a townhome or condo lately has seen crazy price escalation. We saw a 54% increase in one of our properties in just over a year’s time.
What is the average family left to do? Remain renters forever? Some are accepting that reality. So rental rates are also soaring. And rental properties becoming tough to find.