HEADWINDS PREVAILING …
The prevailing interest rate environment, a key factor shaping the 2024 housing landscape, is poised for the first Bank of Canada Rate announcement scheduled this Thursday, January 24. While the BOC rate doesn’t determine mortgage rates, its influence on buyer confidence can significantly affect the overall market.
A key market factor at play is the focus on reducing inflation to the targeted 2%. Adding complexity to the interest rate puzzle is the recent upward trend in the bond market last week. Add in a high unemployment rate and the ongoing challenge of managing immigration to meet growing labor requirements, the outlook for 2024 indicates headwinds are prevailing.
In this multi-layered scenario of market challenges, striking a balance between controlling inflation and maintaining a stable housing market is crucial for sustained economic growth. While most of these issues remain outside of local market control, our voices at the grassroots level remain essential as government and industry work together to solve the housing problem.
As such, focused on the year ahead, one of HAVAN’s strategies will be to actively represent its members on Development Liaison Committees (DLCs) throughout the year, addressing issues such as policy development, neighborhood planning, and proposed fee increases.
With a total of 12 committees to date, including recent additions like Port Moody and New Westminster, staff will be participating in various regions, such as Maple Ridge, Coquitlam, Richmond, Surrey, Langley Township, North Vancouver City, and Delta.
Functioning behind the scenes, these grassroots efforts provide a unique opportunity for HAVAN to offer impactful feedback, helping to shape policies and programs in their early stages on behalf of our members. It is a good reminder to keep the GR Committee and staff aware of local market issues. We encourage you to write to info@havan.ca with information relevant to your relations on the ground.
In addition to DLCs, HAVAN’s GR department, supported by the GR Committee, will be producing a series of reports in 2024 to highlight housing and affordability statistics, covering the economic impacts of construction, the implementation of the BC Energy Step Code, cost of home production, and municipal housing targets.
Finally, the Legends of Housing Dinner presented by HAVAN’s GR Committee, is scheduled next week on Wednesday, January 31. This sold-out event promises unique insights from a panel of industry pioneers, including the founders of Polygon, Tien Sher, Concert Properties, and Anthem Properties. Attendees will have the chance to glean wisdom from these “legends of legends” who will share stories from the past and will provide valuable perspectives for the future. The evening promises to be engaging and will be kicking off HAVAN’s 50th anniversary. We look forward to seeing you there.
If you have not yet purchased a ticket, please email info@havan.ca to get on the waitlist.
HAVAN continues to work with CHBA BC and CHBA to advocate for all levels of government to work together to address the challenges of the housing industry including zoning restrictions, density limits, and NIMBYism.
Looking to stay up-to-date on Metro Vancouver’s residential housing industry? Sign up for Ron’s weekly Monday Morning Briefing and other HAVAN emails here.
QUICK BITES …
- BCREA December report defines 2023 by high interest rates, and slow sales with a brighter outlook as BOC rates are expected to drop in 2024.
- Storeys share MLA Canada report on presale metrics from 2023 as holding firm, but with a subdued picture for 2024 and beyond. The Lower Mainland surprised on the upside and saw a total of 104 presale project launches in 2023, 20% below the 10-year average. MLA Canada notes “Increased costs, particularly in terms of materials, labour, and borrowing, are set to make hurdle rates increasingly difficult for developers to achieve. Developers that are well capitalized and have access to long-term land holds will continue to have the leg up on those who do not.”
- City News reports inflation rose to 3.4% in December, complicating path for Bank of Canada as it gets ready to make its first rate announcement for 2024 this Thursday.
- Further complicating issues, the bond market rose sharply last week, with Better Dwelling siting, ‘it’s not yet clear if this trend will stick around, but at the very least it’s likely to put a floor on falling rates in the near-term.’
- The province announced last week it is providing $51 million in grant-based funding from the 2023 Budget to be distributed among local governments in BC, with the aim to provide support for local governments to meet the newly legislated requirements such as the TOD and SSMUH policies.
- Canada’s Housing Minister is warning that municipalities won’t succeed with applications for federal housing accelerator funding unless they are flexible on zoning rules. Fraser said the federal government received around 540 applications for the fund, but only about 150 may end up being successful.
- In an effort to lessen the pressure on demand for housing stock, the federal government announced today that it is placing a two-year cap on international student visas, as reported in the Globe and Mail.
