New BC Real Estate Association Report Estimates Impacts of Increased Supply on BC Housing Market
CATEGORY: Economics News Releases
TAGS: BC Home Sales Housing Supply Market Intelligence
Vancouver, BC – The British Columbia Real Estate Association (BCREA) has released a new Market Intelligence report estimating the potential impacts of increased housing supply on BC’s housing market. The report, Bigger, Faster…More Affordable? Evaluating the Impact of Supply-Side Policies on the BC Housing Market, finds that policies designed to streamline the development cycle are effective at mitigating demand shocks and corresponding price increases.
“Rising housing prices continue to be a concern for British Columbians despite many attempts by both the provincial and federal governments over the years to slow price growth,” says Brendon Ogmundson, BCREA’s Chief Economist and one of the report’s authors. “While demand-side mechanisms have often been the policy of choice, it is now widely accepted that increasing supply can have a longer-lasting impact. That is what we try and quantify in this report.”
Using an economic model under development at BCREA, the report explores the linkages between the new home construction market and the re-sale market. This allows the authors to quantify how policies to build more homes faster could impact housing prices and the market’s ability to absorb new demand.
Looking at three scenarios ranging from building homes faster, building more housing, and doing so in an environment with a significantly streamlined development cycle, the results show that increasing supply and getting it to market faster would have a positive impact.
“If we can better match supply and demand in a timely fashion, the housing market is able to better withstand the impact of demand shocks and mitigate price appreciation,” Ogmundson adds. “There is a lot that needs to happen to make these types of scenarios a reality, but the most important takeaway is that increasing supply can have a lasting impact on market affordability.”
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