GUEST SUBMISSION: In the vibrant city of Vancouver, where the breathtaking landscape meets a diverse and dynamic population, it is important to acknowledge the powerful force demographics contribute to shaping the real estate market landscape.
Factors such as changing demographics, generational shifts, affordability concerns and an aging population are fundamentally altering the real estate landscape.
Vancouver, like many metropolitan areas, is experiencing the rise of the younger generations, such as Millennials and Gen Z, who are quickly becoming a significant force in the real estate market.
Despite recent interest rate hikes, increased inflation and current economic uncertainty, a survey conducted by Mustel Group/Sotheby’s Internation Realty Canada determined housing demand among even these younger generations remains high.
Consequently, developers find themselves under mounting pressure to cater to the needs of Canadians while taking into account the preferences of the up-and-coming cohorts.
Unlike Baby Boomers, Millennials and Gen Z value housing options that are centrally located, close to transit and provide them with a live-work-play environment.
This increases the demand for innovative housing solutions such as micro-units, high-rise developments and even co-living spaces such as multi-generational homes.
The results of soaring prices
The surge in demand as more individuals seek entry into the housing market has led to escalating property prices in Vancouver and an ever-widening gap between incomes and housing costs.
With no current indication prices are expected to diminish any time soon, the prospect of homeownership has become increasingly discouraging to many Gen Z and Millennial individuals who are starting to save independently for an elusive goal.
The soaring property prices have resulted in an increase in renter households and a decline in homeownership, according to Statistics Canada.
With increased rental demand and a cry for affordable housing, developers in Vancouver are left with the challenging task of finding alternative housing options to accommodate the growing population and the diverse needs of different demographics.
Last year, British Columbia experienced a record-high net loss of interprovincial migration, with many individuals relocating to other provinces, typically Alberta, where property prices are comparatively lower.
Young Canadians, in particular, are searching for alternative solutions to home ownership due to the current housing crisis, such as renting, co-ownership, multi-generational living, tiny homes, or simply living with less square footage to afford their ideal locations.
Finding other more feasible options is only highlighting the gaps within the Vancouver market and creating more of a divide.
Impact of an aging population
Another crucial factor that demands our attention is the impact of an aging population on Vancouver’s real estate market.
As more people reach retirement age and choose to stay in their homes rather than downsize or move to retirement communities, the supply of available housing in the city becomes constrained.
This scarcity in supply contributes to rising housing prices and the demand for suitable properties exceeds the overall available inventory.
The limited supply triggers intensified competition among buyers, inevitably driving prices higher and creating a seller’s market.
This impacts all generations looking for houses, be they first-time homebuyers or families looking to upsize their homes.
These constraints, forcing pressures on the market in many different ways, lead to increased uncertainty that tends to result in properties being sold above the asking price, with bidding wars becoming the norm.
In light of this, it is imperative that we consider the needs and desires of those approaching retirement age and take proactive steps to encourage downsizing.
Introducing specialized developments that cater to diverse housing options for seniors or enhancing infrastructure and amenities in neighbourhoods with a higher concentration of seniors can make these areas more attractive to individuals as they transition into retirement.
The profound effect of demographic shifts
The interplay of these demographic shifts in Vancouver has a profound effect on the city’s real estate market, leading to a series of interconnecting factors.
As Vancouver’s population continues to surge and new generations enter the market, the demand for housing is outpacing the city’s supply. Limited supply within the industry is what sparks high levels of competition, resulting in higher property prices.
With a complex landscape that limits the areas available for development, developers are finding innovative approaches to address the evolving needs of Metro Vancouver residents.
Condos and multi-generational homes are an example of one option that has become increasingly popular over the past couple of decades as it provides a more affordable alternative to traditional single-family homes.
High-rise developments are rising in popularity as they are commonly built with energy-efficient features and sustainable design that is highly valued by Millennials and Gen Z.
By building vertically, more housing units can be accommodated on land that was once designated for a single-family home.
In conclusion, Vancouver’s real estate market is being shaped by a multitude of demographic shifts, including the rise of younger generations, affordability concerns and an aging population.
The preferences and needs of Millennials and Gen Z are influencing housing demands, pushing for innovative and centrally located housing options.
Furthermore, the aging population staying in their homes exacerbates the limited supply, escalating prices and intensifying competition.
The net result of these demographic shifts engenders a complex real estate landscape for Vancouver, compelling policymakers, developers and communities to collaborate on comprehensive strategies that prioritize housing affordability.