When Will the Frozen BC Market Finally Defrost?
Posted by: tim in Vancouver, Sales, Realestock, real estate, property, downtown, downsizing, Canadian Real Estate, buyer's market, British Columbia on Oct , 2009
In this week's Globe and Mail, the title “B.C. Housing Market in Deep Freeze” caught my eye. To me, deep freeze is not such a terrible thing. For example, say I bake a really delicious pie, and I can’t eat it all. I might not want to eat it that evening, but I still intend to eat it sometime, so I stick it in the deep freeze and defrost it a few weeks later. Granted, it’s not quite as delicious as it was when it was fresh, but it still tastes pretty good.
According to the Globe and Mail, new developments in Vancouver, and across BC seem to be stalling, or stopping completely. Vancouver developer Ward McAllister talks about the fact that no-one appears to be beginning new projects in 2009.
The article goes on to talk about a variety of different opinions as to how this year will play out. Some say that by the end of 2009 the housing market will have returned to some kind of normality, while others are being more conservative, and saying that we have a few more years yet. Many are suggesting that there will be no upturn until a year from now around the time of the Vancouver Winter Olympics in 2010. That’s a long time if you are depending on building-related work. It is estimated that one in ten people in BC works in the construction industry, or in a job related to it. Therefore we are not just talking about obvious job losses, for people like welders, bricklayers or foremen, but factory workers who produce materials, or marketing people who work for developers, or the developers themselves. If there are not any new builds in 2009, there are a number of people who will directly suffer, and then the trickle down will indirectly affect us all.
Some solutions as to what developers and others in construction can do to are mentioned in this Globe and Mail article. They include:
· Building rental apartments
· Selling the land meant for condo developments and such to BC housing, to see if they might want to use the land for public housing projects
These are great ideas. Whether BC housing will take them up on the land offer (if everyone is trying it, then probably not) is debatable, but the idea of building rental apartments is an awesome idea. According to an article I read in Forbes a while back, housing and building supplies are coming down in price, so developers could use these now less expensive materials to build decent apartment housing (a rarity in many BC cities, I’m talking about you, Victoria) which will provide an income, and can be sold when the market upturn happens, whenever that is.
The Globe and Mail talks about some developers who have made enough money in the past to ride this out. Many of them are planning more complex, intensive sites, which require more permits and planning than regular condo developments. Planning for the future is another good way, as long as one can afford it, and still be around when it comes to building it!
In terms of terrifying headlines, in my opinion ‘deep freeze’ is better than ‘recession’ ‘downturn’ ‘crash’ and my personal favourite ‘depression’. It implies that that pie is going to be in the freezer for a long time, but eventually, we’ll be able to defrost it, and get on with things…and I for one am getting the ice cream ready.
