Vancouver's new housing affordability initiative is only going to increase the value of single detached homes even more in my opinion. The price appreciation gap between detached single family homes and condos had been growing the past 20 years. Back in 1977 there was very little difference in the average price of a condo compared to a single family home. Now that gap is huge!  the average detached home is worth almost 3 times that of the average condo. This new initiative which will help developers cut red tape and allow them to build denser housing projects faster which will  result in more applications to rezone existing single family homes into multi family strata condos and townhomes. The math is quite simple if you redevelop more single family land into condos it will increase single family land prices even more because it reduces the supply of these single family homes. When you have fewer homes out there the value tends to increase.

On the flip side by building more and more condos you will create a moderating effect on overall prices for these townhomes and condos. This is why we have seen very little price appreciation in downtown Vancouver condo market over the past 5 years while the price of detached single family homes in Vancouver West side, East side and Richmond are up quite substantially over the past 5 years.  

 

Now before all the Real Estate haters start sending me emails remember i am not saying the price of detached homes is going up and never coming down. i am simply explain some of the basic market fundamentals at work in the lower mainland RE market. Prices in the short term 1 to 8 years can go up and down and if you look at the average Vancouver price graph i showed you from 1977 to 2012 you will see there were a number of downturns in the price in that 35 year chart. you will also notice that the long term metric is up way up