Thursday, December 30, 2021

The $2 Million Dollar Home? Average Prices in Vancouver Set to Jump in 2022 - Kerry Gold,

I always enjoy chatting with Vancouver journalist Kerry Gold. Below are excerpts from a recent article she had published in about the outlook for housing prices in Vancouver. At the end of a longer article, I shared five reasons why I had to agree housing prices will continue to rise in 2022, and some thoughts on alternative ways to make housing a bit more affordable for some households.

Detached house prices in Metro Vancouver will go up by 15% in 2022, predicts realtor Bryan Yan, whose end-of-year predictions in past years have held up. The general industry feeling is that prices will keep rising due to another COVID wave, as well as low interest rates, a general fear of missing out, and the fact that sellers are making so much money that they’re either buying up or downsizing.

“It’s a rising tide lifting all boats — everyone is making so much money on their other stuff they sell it to buy something, or they downsize,” says Yan. “They sell something for $8 million and buy something else for $5 million. Basically, what we are seeing is multi offer situations. Prices are going to come up, if they don’t do anything about interest rates they will come up 15% this year.”

Royal Lepage recently caused a stir with a New Year forecast that said the median price of a Metro Vancouver detached house would increase year-over-year in 2022 by 12%, to $1.893 million. The report cited lack of inventory as the key cause.

Bryan Yan thinks that figure is conservative, particularly on the east side of Vancouver. Part of the popularity of the east side is that single-family lots are more easily densified, and the market is strong for townhouses and duplexes. City council recently voted in favour of rental buildings on major arterials that can go as high as six storeys (with a share of below-market units), as well as rental buildings up to four storeys that would replace houses on nearby side streets. Yan says this change for more rental density will most impact the east side and help elevate land prices, bringing the average detached house to $2 million.

But, he adds, the detached house market is strong throughout the entire region.

“A house in Richmond had 34 offers, and that was a couple of weeks ago. Can you imagine? This stuff is moving like toilet paper.”

Developer and urban planner Michael Geller, who in the 1970s managed the social housing program at Canada Mortgage and Housing Corporation, says housing prices in Metro Vancouver are a snowball that will only get bigger. Lack of affordable housing will continue to plague the region as demand grows due to immigration.

“I think they’ve doubled in the last six or seven years, and it is crazy,” says Geller.

He cites five reasons why prices will remain high: low interest rates that will stay low, parents financing their adult children with several hundred thousand dollars for down payments, high municipal fees that are tacked onto each project, climbing construction costs, and lack of adequate supply. He doesn’t believe we can simply build our way to affordability because housing demand in markets such as Vancouver and Toronto will stay insatiable. That means the solutions are in the hands of policy makers who can create housing models that are specifically designed for affordability.

“When immigration gets going and students come back, and as we try to make cities more attractive, we are going to start seeing increased demand. And the line I agree with all the time is we aren’t creating the right supply. I agree with that.”

Geller, who has given frequent talks on affordable housing, cites five solutions. Those include giving developers breaks on having to build pricey parking and building better transit options instead, the creation of financing models that already exist in Canada and other countries, government support of the non-profit housing sector, faster permitting approvals times, and freeing up swaths of land that is available to densify but is being wasted as parking lots instead. We could also add onto existing one-storey buildings where possible and create density without tearing everything down.

In terms of financing models, he cites the shared-equity home ownership programs common in the UK, where banks provide mortgages to non-profit housing groups. For example, a person purchases one-third of a condo from a non-profit developer and property manager who retains ownership of the remaining two-thirds. Over time, through rent, they acquire more of the unit until they own it outright.

It’s better known as “stair-casing,” because you are climbing the stairs to ownership.

Another model is the shared appreciation mortgage (SAM), whereby a person shares the appreciation of the property with the lender upon selling, in addition to paying off the mortgage. This arrangement works for buyers who can’t afford the upfront cost of the down payment. Typically, homebuyers pay a reduced interest rate on the loan.

“The interesting thing is that this is a model most developers use when they create developments. With only a couple of exceptions, all of the projects I did were developed with other people’s money. I paid a higher interest rate, but they didn’t get [their money] back till the end, and I gave them a percentage of the profits. You can do the same thing with homebuyers.

“If a family member came to me, I might say, ‘I will lend you $300,000, and you don’t have to pay interest now, but it will accumulate, and in five years, when you sell it, it will be worth more, and you will pay me the interest plus a percentage of the increased value. That is happening. It’s quite common in the states.”


Wednesday, December 22, 2021

What will happen in 2022? Let's first look at my 2013 Vancouver Sun predictions

In this forecast I again focussed on an expectation that alternative forms of housing found in other world cities, would become more popular in Vancouver. 

Fee-simple rowhouses. In another effort to promote this form of housing, I again put it near the top of the list of what we could expect. I thought the requirement for Condominium Depreciation Reports would increase homeowners' interest in alternatives to strata living. Again I was wrong1

Smaller detached homes, duplexes and coach houses. Again, I anticipated increased interest in these forms of housing. While I was right about duplexes and coach houses, I was wrong on my timing.

Stacked townhouses. I predicted greater interest in this form of housing that was common elsewhere but not so much in Vancouver.

Six-storey woodframe apartment buildings. Although it had been four years since the B.C. Building Code had been amended to allow an increase from 4 storeys to 6 storeys, the development industry had been slow to respond. However, with increasing municipal support for more intensive land use along arterials, strong demand for rental housing and affordable ownership, developers were likely to embrace this in the coming year. Eventually I was right!

Mid-rise buildings. Given growing public concerns about highrise, I expected planners to promote midrise buildings 8 to 10 storeys high, along with some 12 storey apartments similar to Kerrisdale. 

Garden cottages. Noting the popularity of laneway housing, I forecast that some municipalities would allow laneway housing on lots without lanes. I called them 'garden cottages', a term used in Washington State. I also hoped laneway units would be allowed to be sold as well as rented.

Floating homes. Noting there had been increased interest in modular and container housing in the past year, I forecast interest in another innovation - floating homes. While I admit this was more aspirational than a genuine expectation, we have seen increased interest in the floating home community at Mosquito Creek in North Vancouver. I still think this will become more popular if government regulations allow.

More interesting housing designs. Noting the public's dissatisfaction with the proliferation of grey and green glass towers, I forecasted that developers would tempt new homebuyers with more interesting shaped buildings, greater use of colour, and landscaping on roofs.

House prices. To those waiting for declining house prices, I told them not to hold their breath. As the region becomes more attractive, we can expect more immigrants and boomers from other parts of Canada, thus keeping prices high.

Highrises vs. Gentle Densification. While one way to ensure supply keeps up with demand is to build more highrises, I proposed a greater focus on gentle densification. Unfortunately, it appears few developers read my column!

What will happen to housing in 2022? Lets start with my 2012 Vancouver Sun predictions.


Over the past 10 years I have written annual outlooks in Vancouver Sun West Coast Homes. I looked at planning and real estate trends, housing prices, and other forecasts. On re-reading these articles, I have found that I am often wrong, but also right in terms of what might happen. However, I was always wrong on timing. Below are excerpts from earlier year-end outlook columns


In December 2012 I listed 10 things to be expected in 2013 (in alphabetical order)

Car sharing and reduced parking requirements. Just as fax machines gained popularity as more people acquired them, I predicted increased interest in car-sharing. This would allow municipalities to reduce minimum parking requirements with the attendant benefits of greater affordability, reduced congestion and pollution.

Depreciation Reports. I anticipated that the new requirement for every condominium to complete a depreciation report would result in some owners discovering the cost of repairs was greater than the value of the improvements, with a call upon government for assistance.

Fee-simple row houses. As a result of a legislative change related to party-wall agreements, I predicted an increased interest in individually owned rowhouses. I was wrong.

Laneway and coach house programs. With the success of the Vancouver program, other municipalities would introduce similar programs, but with greater flexibility to preserve smaller, older homes.

Micro suites. The success of projects in Vancouver and Surrey, combined with reduced parking requirements, will encourage other municipalities to reduce minimum suite sizes to allow smaller units for sale and rent.

Modular housing. I hoped for renewed interest in my 2009 BC Housing Study on how modular units could be set up on vacant land for the homeless, to be relocated to other sites at a later date.

Regeneration of older social housing. While awaiting a construction start on Little Mountain, I anticipated reviews of other older public and social housing projects.

Replacement Rental Housing. As older rental projects deteriorated, I predicted that housing experts would call on provincial and municipal governments to establish policies to require replacement rental housing in new projects.

Smaller housing on smaller lots. Given downsizing empty-nesters' desire for alternatives to rowhouses and apartments, some small house infill developments would get underway.

Transit funding. Discussion on this 'hot' 2012 topic would continue, with many believing a comprehensive user-pay system was preferable to selective bridge tolls and property tax funding.

I noted that none of these ideas were new. However increased interest in more sustainable lifestyles would give greater currency to ideas previously considered just fads. While 10 years later car-share has increased in popularity (notwithstanding the demise of Car2Go); reduced parking standards are in the news; condo depreciation reports have led to redevelopment properties; and replacement rental requirements are now in place, other expectations are still not happening. But they will!

Friday, December 17, 2021

Geller Holiday Greeting Cards 'in the news'

Thank you David Beers and The Tyee for deciding it was worthwhile including my Holiday Greeting 'Card' in your newspaper. I have become a regular subscriber and hopefully others will too! We need journalism and journalists!

ps. This is not the first time my 'card' found its way into a newspaper. Below is a 30-year old clipping from the Vancouver Province.

Thursday, December 9, 2021

December 3, 2021 An anniversary staycation at Le Soleil Hotel, Vancouver

Given travel restrictions and Covid-19 concerns, Sally and I decided to celebrate our 40th anniversary by spending a night at a Vancouver Area Hotel. We had a lot of choices, but selected Le Soleil Hotel in the 500 block Hornby since we previously enjoyed a delightful dinner in the Alouette Bistro, its French restaurant. We thought it would be nice to return there for an afternoon downtown and another dinner and  breakfast.   

Le Soleil is described as a luxury, all-suite hotel. While it is not usually mentioned in the same breath as the Shangri-La, Pacific Rim, Rosewood, or Four Seasons (may it rest in peace), it turned out to be a good play to stay. The hotel has a warm and inviting lobby, and while the interior design isn't necessarily what we would want in our home, who wants to stay in a hotel that's just like their home?

When booking, I mentioned we were there for an anniversary, but was surprised when we discovered we had been upgraded to one of the penthouse suites. It really was quite impressive with a double-volume living room with a kitchen area, a beautiful window-wall, well-appointed bedroom, a separate office, (yes, an office) and a large, wrap-around outdoor terrace. We were surprised to find a hand-written message from the manager along with a bottle of good red wine and some chocolates. Thank you Varun Malik. That wasn't necessary, but most appreciated!

Once again, we enjoyed our dinner in the very lively two-level restaurant and were happy to return a few hours later for breakfast. The breakfast menu features some most interesting menu items. Since I had a cassoulet for dinner, I decided to pass on the breakfast cassoulet, but it looked very good. Although I'm over 70, I decided on the avocado toast with smoked salmon. 

The purpose of this blogpost is really to encourage Vancouverites to enjoy a staycation in a downtown hotel. While I have no hesitation recommending LeSoleil, (although they do need to find a better parking solution since the valet parking is not operational), there are so many other Metro Vancouver hotels to choose from. 

Why not check out Versante, John Evan's new hotel in Richmond. We plan to do so soon since an evening walking around parts of Richmond is not unlike an evening in Hong Kong or Shanghai!

The nightly rates at most hotels are embarrassingly low at the moment since there are not a lot of visitors to the city. Our desk clerk told me that currently 80% of the Le Soleil guests were lower mainland residents enjoying a night in town. But I suspect there will be a lot of availability, especially over the next few months and correspondingly low rates. (When I worked with Westin Hotels, the manager once confided that even in a good year, Vancouver hotel occupancy rates in January and February are astonishingly low.) If we don't support these hotels and restaurants, it will be very difficult for the staff, and ultimately we may lose some businesses. 

So while essential travel restrictions are in place, and Covid fears remain, check out this list of Vancouver area hotels and book into one for a change of pace. I think you'll thank me for the suggestion!

December 3, 2021-our 40th Anniversary

40 years ago today, Sally and I got married. A first marriage for both of us. 

As many of you know and appreciate, Sally must be one of the most tolerant, patient, and forgiving people in the world to put up with me for 4 decades. As my sister Estelle said in a text message received this morning, I must be singing Alan Price's 'O Lucky Man'. I am a lucky man. Now hoping for another decade or two together. Happy Anniversary Sally!

On our wedding night, before heading off to an Arizona honeymoon, we stayed at the International Plaza Hotel near the north end of the Lions Gate Bridge. That's where Sally and I first lived together. She moved into my ground floor unit overlooking the city. Since the International Plaza Hotel no longer exists, we decided to spend the night at Le Soleil Hotel in downtown Vancouver. It was a wonderful experience.