Regular reader and commenter ‘formula1′ has pointed out an interesting statistic: that of the apparently fast disappearing SFH in the City of Vancouver.
(from a table in ‘Metro Vancouver Housing Book’, metrovancouver.org, April 2011 [pdf])
formula1 writes (at VREAA 9 Dec 2011 9:30am and 4:40pm):
“If you want an explanation of the price increases in detached the last 10 years you need look no further than the loss of supply.
We were at 67K in 1991, 65K in 1996, 65K in 2001 and 48K in 2006 – so the majority of this 20K loss happened in just 5 years. So here we are 5 years removed from the last census. If the trend holds we’re now at around 30K detached…a loss of 60% since 1991.
Kinda puts a kink in detached housing crash plans.” …
“The demand for a SFH is alive and well. The supply is on life support.
This is an interesting claim, let’s look at the figures.
A drop in detached SFHs in Vancouver from 65,390 to 48,365 between 2001 and 2006. That’s a loss of 17,025 SFHs, or 26% of the existing SFHs, or one in every FOUR SFHs, in just 5 years!! Where did all those houses go?
We find this number remarkable. If it is indeed true, we’d have to address the implications, as formula1 points out. But the numbers have what researchers call questionable ‘face validity’, meaning that, just on the face of it, it’s a figure we find we want to question. Did Vancouver really lose one in every four SFHs over 5 years? Part of our reason for asking for verification of the data is that, in our recollection of watching SFHs destroyed between 2001 and 2006, almost every time one went down one or two new SFHs seemed to rise in it’s place. Sure, some were levelled for townhome or condo developments, but surely not a total of one in every four?
We’d ask readers to help clarify this matter.
Firstly, is there anybody who can shed light on the data table or source? There is a footnote to the table in the report regarding reclassification of certain dwelling types between 2001 and 2006. Is the apparent change in SFH numbers simply in part a classification change?
Secondly, did any of you out there actually see these 17,025 SFHs disappear? Is this just something that I missed? Sure I’ve seen some go, but 17,025?? Let’s collect a rough inventory of the SFHs in Vancouver that were knocked down to make way for multi-occupant dwellings. Something like ’2004: ABC block XYZ Avenue; 80 SFHs became EFG condos (or highway, or whatever)’. It’ll be most efficient to first focus on places where this happened in large swatches. We’ll ignore SFHs that were knocked down to be replaced by a single SFH, but, on the other side of the ledger, let’s take note of SFHs that were knocked down to be replaced by two or more SFHs (contributing to a rise in the number of SFHs). Post the observed data as comments and, if it turns out to be necessary, we’ll collate later into a separate table.
Thirdly, we thank ‘formula1′ for sparking this exercise. If the number of SFHs are dropping at a rate of 25% every five years, we need to consider this effect on the whole market. ‘formula1′ does commit a logical error in assuming that the 2001-2006 trend has continued 2006-2011 and that “..we’re now at around 30K”. That’d mean that more than one in every two SFHs had disappeared in the last 10 years, a claim that is very hard to believe.
So, are SFHs indeed disappearing at a remarkable rate in the City of Vancouver?
Please shed light on this, readers.
Well, they are still building them…
http://www.buyric.com/news/2011/11/october-2011-housing-starts-decline-metro-vancouver-270/
Hmmmm In Maple Ridge they clear cut a section of the northern hills and built what looks like a mini city. (as we know “they aren’t making any more land”) or take a look at the new developments on the Surrey Langley border, 192nd street and behind Willowbrook mall. built so many of these (lack of housing) that many of the properties have basement suites and these god awful “carriage houses” built over the garage. Pretty sad if the only way you can afford a “home” is to be a land lord and pray that you can rent out in the “over supply” you and your neighbours bought into.
Ah yes this sidebar is one of my favourites. Start here:
http://realestatetalks.com/viewtopic.php?f=8&t=60428&start=15#p231563
if you dare…
(Hint: how do you think “single detached” is defined? Do you think that’s the same as “detached”?)
That is so most excellent, Dude.
Actually, this most interesting question could be quickly resolved with either a few clock cycles (mere Zepto/Yocto seconds as DustInTheWind is measured) of the Kraken’s processing power and/or a crowd sourced analysis of YVR satellite imagery in the public domain (GoogleEarth’s layer function [?] does, I believe, reveal imagery capture dates – and allows for selective ‘super-position’ ‘o capture)…
Indeed, Nem, as I alluded in the RET thread, a simple straw count of dwellings and a bit of the old “extrapolation” one can arrive at similar answers.
I have to admit, my time on RET is a guilty pleasure, but also part of my community service hours helping the disadvantaged. It really isn’t work at all.
One of my latest acts of altruistic kindness was providing some clarity determining future house prices:
A) Determine the number of immigrants coming into the city each year
B) Determine the number of years left in the existence of the universe
C) Multiply A by B
D) Use result in C to explain why prices only go up in the long run.
You’re welcome.
Okay, thanks jesse, we hadn’t followed that RE Talks thread, your comments there change things completely:
jesse 13 Oct 2011 3:38pm – “You do know that ‘other’ includes detached homes with suites, right? Most new detached dwellings are classified as multi.”
jesse 13 Oct 2011 6:25pm – “Detached houses with suites are multifamily. It’s in the footnotes. Which is fair when you think about it. If you have suites it’s not really a “single family home” is it!”
—
If new SFHs with a finished basement suite is now reclassified as ‘multi’ (‘other ground oriented’) then the observed change is simply a big yawn.
In our opinion a SFH doesn’t suddenly become a non-SFH when the illegal basement suite becomes a legal basement suite. If this is the main contributing cause of the ‘loss’ of these 17,025 SFHs, we can safely declare that the SFH is not dying in the City of Vancouver.
Agreed, formula1?
lions bay is a perfect mini example: would be easier to verify too.
“we can safely declare that the SFH is not dying in the City of Vancouver.”
It is dead as far as living arrangements are concerned. They’re counting something here, it just wasn’t what we thought.
rp1 -> What they’re counting is how many SFHs, at current prices, need basement suites to meet mortgage payments.
When prices drop basement tenants may well find that condos are truly affordable, and more comfortable.
same classification 1991, 1996, 2001, 2006 – same stats that show redevelopment of SFH to multi.
Open your eyes
formula1 -> But is it true that is a SFH is demolished, and the new SFH built in its place, with a basement suite, is then reclassified as ‘multi’? Is that true? (serious question)
What exactly is being debated here? Its getting a bit tedious. Just saying.
formula1 is suggesting that large numbers of SFHs are actually disappearing; others are suggesting they are not disappearing, but that they are simply being reclassified because of a declared basement suite.
It may seem like nit-picking, but it is a material point.
Well according to REBGV, whatever they consider SFH is not disappearing. In 2001, about 1495 SFH sold in May (chose this month for consistency). During the bullish golden years, 2005-2007, about 1800 SFH sold each May. This year in May, 1570 SFH sold.
For both sets of stats, we can spend endless weeks and months arguing about what was considered SFH when. I’m not going there
and the new SFH built in its place, with a basement suite, is then reclassified as ‘multi’? Is that true? (serious question)
wrong vreaa. This is jesse’s assumption. The data I provided uses the same definition from one census to the next, to the next, etc. This data points to a loss of SFH. If you’re wondering why prices surged after 2001 just take a look at the loss of detached in this time period. It’s as remarkable as the price increases.
formula1 -> Then back to the original question:
If these SFHs have disappeared and not simply been reclassified, where were the 17,025 SFHs that disappeared from 2001-2006?
For the City to lose one in every four SFHs in 5 years, you’d think there’d be large swatches of land where these structures evaporated (for other use, of course). Where are those places??
do you actually live in Vancouver?
If so I’d think you must have seen these redevelopments – I have.
Open your eyes vreaa, drive around – heck, read your own blog (poster Keith). If you aren’t in absolute denial like Jesse you’ll see the what’s happening right before you
furthermore,
from page 15 of the 2006 census:
“Over the past ten year Census period (1996 – 2006), the single detached dwelling share has dropped from 45% to 35% and
indicates that the single-detached housing structure type
continues to decline as the most common type of housing in
the region.”
(region, not Vancouver city – the city of Vancouver has even more dramatic changes)
http://www.metrovancouver.org/planning/development/housingdiversity/HousingDataBookDocuments/Metro_Vancouver_Housing_Data_Book_2011.pdf
formula1 -> I’ve seen dozens of SFHs being knocked down, dozens.
But:
1. Many of the dozens that I’ve seen knocked down are simply replaced by SFHs; so that’s a wash.
2. 17,025 is about 1,500 Dozen… where exactly in the City of Vancouver have all those houses been knocked down? And replaced with non-suite (if your suggestion is correct) multi-occupancy dwellings? Where? (don’t answer ‘everywhere’, let us know where a few thousand, at least, disappeared).
I suspect these numbers are only this large because they include reclassification, a la prior discussion.
reclassification? You mean census Canada moved the goalposts but forgot to tell everyone about it? Highly doubtful.
We’re going to have to agree to disagree on whether the detached home supply is getting shorter or not.
No, not moved the goalposts, but simply started calling SFHs with definite suites ‘multi-household’ dwellings (which would make them ‘other ground oriented’ in the table). Note that ‘other ground oriented’ went UP 16K 2001-2006, while ‘single detached’ went DOWN 17K…. similar figures.
Sure, there were some condos and duplexes and townhomes built, but not enough to require the loss of 17,025 SFHs.
“This is jesse’s assumption. The data I provided uses the same definition from one census to the next, to the next, etc. This data points to a loss of SFH.”
If by “assumption” you mean reading what’s written then guilty as charged. LOL
Either formula1 is being deliberately obtuse or cannot grasp simple logic:
1) “SFH” in those data is “single detached” dwelling
2) “Other ground oriented” includes “detached” houses with basement suites. It’s right there in the footnotes. Again, we have to be clear about our definitions.
The data in the metro report are clear that “single detached” is only one family residing at an address with a detached house. If the house shares a wall with another address, or has suites with separate entrances to which others claim residence, and this residence if filed, it is not “single detached” for reasons obvious to most readers.
This can be corroborated with a simple google satellite view count to show that the number of “detached” homes is not dwindling. Any drive through the vast expanses of the non-core neighbourhoods of the City show this to be true. Most of the densification alluded to is concentrated in specific neighbourhoods but does not extend much beyond them. I expect many posting here are somewhat biased to what extent the redevelopment into multiplex and condo is occurring when the reality is most of the detached stock is untouched.
Again, if you open your eyes, and actually bother travelling to most parts of the four corners of Vancouver, one can determine that reports of the death of the “detached” dwelling are greatly exaggerated.
Alas I am afraid formula1 has been soundly beaten, though likely doesn’t know it.
@jesse:
“Either formula1 is being deliberately obtuse or cannot grasp simple logic”
Can’t it be both?
This same individual has at different times asserted said that loss of new/young professionals is either 1) a fabrication by embittered renters or 2) an acceptable side effect of the new Vancouver real estate paradigm (with these individuals easily replaced by immigration [since language barriers and training disparities are not real things]). Hey F1: it’s either happening or it isn’t. Pick one. Given that you can’t even land on a single handle to post under, this is likely asking too much.
Even if true at face value, demand will not be inelastic. It will be strongly price-dependent. Crash is not off.
Inelastic ? I would gladly pay a few million dollars, live in a bus stop (but with view to the mountains, designer seats and tuscany-inspired colors), for the privilege of being in BPOE then go sky, swim in the ocean and play golf, all in the same day.
every mania/bubble, someone always trots out the pseudo-facts. reason i can’t stop the ranting (sorry all): THIS JUST HAPPENED NEXT DOOR AND IT WAS ALL OVER THE NEWS. if i take that at face value, my home town is full of world class, perhaps even best in class, financial incompetence. now is this by design or just a natural occurrence? it’s just so frustrating.
chubster -> We agree. One of the most remarkable things about the speculative mania in Vancouver RE is how it has played out with an almost identical ‘bad example’ right under our noses… the US housing crash (and, for that matter, the Irish crash, the Spanish crash, the Chinese crash, etc etc..).
When we do crash, as is inevitable, folks will look back and ask “what the hell were they thinking?”
That all said and done, it’s not really ‘surprising’. Humans have a remarkable capacity for self-deception, and the ‘it’s different here’ Vancouverites have simply taken this up another notch.
I’ll shed a little light. I moved into a SFH in East Van in 2006, street is a short cul-de sac. In the last 5 years in this little block, 3 houses have been torn down and replaced with half duplexes. A “teardown” has been purchased for 500 – 600k and replaced by two halfduplexes on a standard lot of 1100 to 1200 square feet, selling in the 600k range each in todays market. Large areas in east van the SFH has been rezoned duplex, and there are a fair number of old houses that lack heritage value and would be prohibitively expensive to renovate to code with permits – just ask Froogle Scott. Within a few blocks of my house, these half duplexes are being built on many streets. SFH’s are largely Vancouver specials and the occassional heritage home, with fewer and fewer teardowns left. There have been a couple of 3000 square foot heritage houses bought and professionally renovated at huge expense, they carry assessments well north of a million dollars with a basement suite and a couple thousand square feet for the owner.
good post Keith.
Go to show you…when you start to doubt plain hard facts all you have to do is open your eyes
So then gosh, within twenty years there won’t be any more SFH in Vancouver? Or maybe there will be just one, but it will be worth one trillion dollars?
But actually, it looks like there has been a shift of dwellings from one category to another (from “single-detached” to “other ground-oriented”). Perhaps this stems from recognizing informal basement suites, or something similar?
The entire population of Canada can fit into California. Santa Barbara, San Francisco, all of those towns and cities up and down the coast are located in between water and mountains.
But, somehow, Canada is running out of land. And houses. And trees.
My Brother built a 3 level 2900 sq/ft home and a 500 sq/ft carriage home on top of the detached garage. His family lives in the top 2 floors of the house. The basement has 2 suites. So there are a total of 4 familys living on a 33×122 lot. I think the city classifiies this set up as being closer to that of a motel than a SFH.
Again, back to housing starts, and looking at 2010-2007 data here…
http://www.metrovancouver.org/about/statistics/Pages/KeyFacts.aspx
The only type of structure that actually saw recent construction growth in both the City of Vancouver and the Metro area was SFH. For the 4 year period (2010 – 2007) the Metro area single family home starts increased 7.7%, duplex’s -39.0%, row -11.7%, apt -39.8%. For the City of Vancouver SFH starts increased 56.1%, duplex’s -23.1%, row -4.1%, apts -8.1%.
For 2010 a total of 4,535 SFH units were built in Metro Vancouver with 799 of those units in the City of Vancouver. 7,948 apt units were built for the Metro area with 3,033 of those in CoV.
So, yes there may be densification happening, especially in the City of Vancouver, but SFHs are still being built at a rapid pace and it appears they will remain a significant part of the housing inventory across the region.
Yes, it does seem that way.
As we’ve said previously, the death of the SFH has been exaggerated.
Just another rusty BS statistic along with the supposed 40,000 per year of new lower mainland residents when BC migration is actually now negative! You’ve got to call a spade a spade.
interprovincial may be negative but net migration is likely positive.
Many helpful and educational posts this past week (with the possible exception of my Mr. Floatie anecdote).
But now — I want to reveal the letter I received yesterday in response to my writing Prime Minister Stephen Harper back in September about the Vancouver speculative mania!
Remember when I first stormed onto this blog and recommended everyone write to politicians about the situation here? With my dual citizenship, I get to harrow legislators all over the continent, and as I feel the need to speak up, I do. However, I can’t say the VREAA host didn’t warn me….
Are you ready?
Mr. Harper himself didn’t respond, but the letter was forwarded to A Minister. She answered by referring me to — wait for it! — the CMHC!
Below, I’ve provided excerpts from the letter, with my comments interpolated in brackets:
“I appreciate the time you took to share your concerns about the high cost of homeownership in the Metro Vancouver area. I recognize that there have been a number of reports in the media stating that the current demand for homes from new migrants to Canada and even foreign ownership has influenced home prices in Vancouver. Unfortunately, the evidence is largely anecdotal [SIGH]…. However, CMHC … does examine a wide range of factors which influence housing markets and impact house prices.
“In terms of housing supply, it is generally acknowledged that Metro Vancouver’s land base for new residential development is constrained by natural geographic features [Damn you, Grouse Mountain!] and competing non-residential land uses [cranberry bogs? Pacific Spirit Park?]. In terms of housing demand, low mortgage rates [you said it, I didn't!], employment opportunities [where? Lots of us would like to know!], and population growth [hey, we thought a lot of people were LEAVING!] also play a contributing role. These market conditions [didn't I hear about this from Ronald Reagan once?] explain the level and movement in house prices [well, that gets politicians off the hook, doesn't it?].
“In terms of price level, the REBGV has been recording some of the highest average home prices in Canada; however, it is understood that the Metro Vancouver average has been greatly influenced by the sale of many luxury homes in a few specific market areas [half the city?]. Furthermore, average prices tend to be skewed by price extremes. Median prices, which reflect market mid-points, are more indicative of the market in general. [Oh I'm so relieved!] Median prices are usually lower than average prices and as such, the income requirements to purchase a home are lower as well. [VREAA numbers jocks: please let us know more about this, if you like. I thought from what I've been reading that you didn't have to have much income at all, just a bank officer in front of you!]
“In terms of the short term outlook, CMHC expects more balanced housing market conditions for Vancouver and, hence, more moderate price gains. [Break out the bubbly!]
“You may wish to refer to CMHC’s housing market reports, such as the Housing Market Outlook and Housing Now, which provide information on home prices for new and resale housing in Metro Vancouver.” [Thanks, but I trust this blog more.]
Thanks, Vesta. And condolences.
We had a similar experience writing the Minister of Finance some time back.
You can see where we’re coming from with our somewhat jaded “let-the-market-sort-this-out” position. It’s not a position we take by choice, but rather because we really don’t see any feasible alternatives.
@vreaa — Yes, I can definitely see where you’re coming from. Sometimes the political leaders who I think could do something remind me of Melville’s Bartleby the Scrivener — “I would prefer not to.”
But when I thought of the VREAA blog today I thought of that quote widely attributed to Margaret Mead: “Never doubt that a small group of thoughtful, committed citizens can change the world. Indeed, it is the only thing that ever has.”
the cmhc is very well-schooled in fedspeak. the first principle: talk is cheap, so apply liberally. davidoff, pretty much any economist except the austrians (try on a bit of hazlitt or rothbard to get the polar opposite).
median vs mean. they’re not answering the question. yes, there is some high-end skew but this is the usual 1st line spew. i’m sure all the median price metrics are similarly out of whack. in a productive, competitive industry, this kind of stuff pretty much ensures you’re getting laid off the next down cycle.
makes you wonder why are people willing to work so hard in some aspects of their lives, yet consign themselves to this in matters of supreme importance. it’s as if the gravity of the process warps reason. the greater the consequences, the more they switch off. the makings of an ideal serf.