Thursday, February 07, 2008

Victoria Housing Prices

The price of housing in Victoria is too high. This comes about for one single reason, there is not enough supply to meet demand. The more housing units will mean more cheaper housing for everyone.

The faster something like Bear Mountain is built, the more people move there from their houses elsewhere in Victoria. Each time someone buys one of the new upper end houses, they start a chain of purchases going down the value chain. The more Gordon Head or Broadmead houses that come on the market, the more the buyer gets a deal. This means the lower value neighhourhoods have more houses on the market as people try to move to the upper scale neighbourhoods.

If we were to see 3000 new housing units built in the region per year, we would see the market stagnate and the price of housing to fall in relative terms. We would also see a lot more housing come onto the rental market as it empty houses are of no financial benefit.

If people want to see lower housing costs in this city, they should be backing every proposed housing development. Every huge condo tower needs to go ahead.

The interesting thing at the moment is that people are opposing the Bear Mountain development. People are protesting the construction of the needed interchange at Spencer Road. If they manage to stop the housing being built, they will reduce the new housing stock coming onto the market and thereby keep vacancy rates very low and house prices high. For the sake of low cost housing we need to see numerous more Bear Mountains built in this region ASAP.
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