In 1976, the BC assessment authority set its value at $6,500. Last year, it was assessed for about $700,000 but a sale price today would likely be substantially more.
The Bank of Canada Inflation Calculator says $6,500 in 1976 is equivalent to $29,600 in 2021.
Something is wrong with BC’s real estate market and something is wrong with Canada’s official calculation of inflation. (Does anyone believe that inflation in the last year is 1.1%?)
I am certain both the real estate markets and government claims about inflation are defective.
My example demonstrates clearly what has been facing young adults in recent years. Property ownership, even on rural lands well removed from a major city, is impossible for people not extraordinarily successful in establishing financial resources or funded by the Bank of Mom and Dad.
People already on the property ladder might enjoy real estate price escalation but this fosters a sense of despair for excluded persons.
In my opinion, despair and lack of opportunity are factors that help drive substance abuse problems that have been killing thousands. For many of us, how we are housed is of extreme importance. The housing affordability crisis is growing worse in 2021 and shows little sign that it will ever improve, without radical responses.
The BC Liberal Government refused to address affordability issues because the real estate industry was a large benefactor of that party. In addition, property transfer taxes were putting billions of dollars into the public treasury.
I am not sure the BC NDP dares to alter the status quo. Anything that deflates the real estate bubble will leave victims behind. We have seen recent warning about personal debt levels and a sudden reduction in land and housing prices would be devastating to many. If government helps one large population sector, it may cause unacceptable pain to another sector.
According to CIBC Deputy Chief Economist Benjamin Tal, if you think housing is unaffordable now, just wait…
The solution may be found in Europe. By example, Vienna has more than 200 hundred thousand units of public housing, roughly one-quarter of the total.
It may be that only public ownership can solve a problem created by private ownership of the nation’s housing stock.