Housing prices vs. land prices – Vancouver, BC

One chart to note in discussions of urban housing affordability, from Vancouver, BC.

vancouver housing prices

The chart is from The Globe and Mail, looking at the changes in housing prices by the type of unit in Greater Vancouver. While condo prices have increased substantially, that increase is nothing compared to the boom in single-family detached house values.

“It’s really the value of the land that is driving prices higher for detached properties and widening that gap,” said Darcy McLeod, president of the Real Estate Board of Greater Vancouver.

Emphasis is mine. This demonstrates a few things:

  • In high-demand areas, new dense construction can and does improve affordability by making more productive use of expensive land. As the adage goes, a skyscraper is a machine to make the land pay.
  • Defining affordability in big cities solely in terms of single family home prices is misleading. Focusing on those prices also might skew potential policy solutions, which could focus on making housing units more affordable instead of making scarce land more affordable.
  • Given the scarcity of land, it’s hard to imagine a set of policies (barring a regional economic decline) that would ever make single-family detached homes affordable. Most developable land would be a candidate for denser development.
  • Skyrocketing values for single-family detached homes in Vancouver’s core indicates they would be good candidates for more intense development; if such evolution were allowed by zoning.

2 comments to Housing prices vs. land prices – Vancouver, BC

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