Economic and Housing Outlook

0:00 – Affordability Pressure Across British Columbia

0:00 Brendon Ogmundson: I am Brendon Ogmundson, Chief Economist from the BC Real Estate Association. I'm going to be talking about the outlook for housing and the economy in BC, and really concentrating on housing affordability, and what we've been trying to do to help affordability, and maybe what we can do in the future to improve it. So affordability in BC, I think as everyone knows, is pretty challenging, and it has been for a very long time.

0:35 But really in the past couple of years we've seen affordability all across BC go from kind of a struggle in a lot of areas, but more so in major cities, to something approaching near impossibility in major cities. And it has become really difficult even in areas that used to be a bit of a refuge for affordability.

1:02 – Mortgage Payment Jumps Since 2019

1:02 Brendon Ogmundson: We can see this, and how quickly things change, if we look at what would have been an average mortgage payment in 2019 in different areas of BC, and how much that changed from 2019 to 2023. So in 2019, you know, we still had areas, Chilliwack, places on the island and the interior, that were still really affordable. The pandemic came along and changed a lot of things, shifted demand a lot around the province because of work from home and people trying to get out of bigger cities.

1:35 That caused prices to go up a lot in a lot of small markets, and then rates followed, interest rates started going up. So that combination of an increase in price and an increase in mortgage rates led to real jumps in mortgage payments, basically doubling in places like Vancouver Island or Central Okanagan, Kelowna, all over the interior. Really, really large changes in what would be an average mortgage payment.

2:05 – Generational Rate Divide and Stress Test

2:05 Brendon Ogmundson: And this all happened in like a year, a year and a half, really, like 2020 to 2022. Whenever we talk about affordability there's sort of this natural impulse for generations to argue with each other. It generally takes the form of millennials yelling at baby boomers, people over 60, about how difficult it is to get in the housing market, how easy it was back when they were looking to buy a home when they were young, and how inexpensive prices were.

2:38 That's usually countered by baby boomers who, if you mention anything about mortgage rates, will automatically tell you, they've been programmed to tell you, that their first mortgage was 18%. And so we have these sort of generational divides, and they're both kind of right. If we look at prevailing mortgage rates by generation, if we just look at what was the average mortgage rate when different generations were in their prime home buying or household forming years, 25 to 40, there's a reason why baby boomers have so much scar tissue when it relates to mortgage rates, and that's because they were really high.

3:18 So the average over that period was like over 12%, peaked at 21 and a half percent. If I had a 21 and a half percent mortgage at any point in my life I would never stop telling people about it. So you have to cut the baby boomers a little bit of slack. But it's also true that for millennials this is an extremely difficult time. If you're in your early 30s, and Gen Z is going to be feeling this too in just a few years when they're into their household forming years, it's really difficult.

3:51 This is the first period in a very long time where we've had a sustained increase in mortgage rates and no one really expects them to come back down. At the same time we also have a stress test that wasn't a thing until just a few years ago. So that means really the rate that you're going to have to qualify at, if we're going to be around a 5% mortgage rate, is like 7%.

4:15 That's a mortgage rate that hasn't been super relevant in Canada since like the late 90s or early 2000s. So a much different mortgage rate environment for the millennial and Gen Z than at any time in quite some time.

4:30 – Rental Vacancies and Suppressed Household Formation

4:33 Brendon Ogmundson: And it's not just the ownership market that's struggling, the rental market's kind of a mess. We used to have at least some parts of BC where we had healthy vacancy rates. We tend to like to see a vacancy rate of about 3% in a market to consider it healthy. We haven't been there in any market in BC since about 2010. As of 2022, when sort of the most recent data for vacancies was available, there aren't any large markets in BC that have a healthy vacancy rate.

5:11 With really low vacancy and lots of demand comes very high rents. And so no surprise, over the past decade plus, rents all across BC have been rising very, very quickly, 40 to 80% across markets. The consequence of this really difficult affordability, if you look at especially really young people, 25 to 34, dual income, those households are really having a hard time. If you look at their average mortgage payment compared to their income, there's been no time in history, in Vancouver, but even outside of Vancouver, there's been no time in history where affordability has been this strained.

5:58 So even accounting for those 20% mortgage rates back in the early 80s, never has it been more difficult for a really just starting out kind of young couple to get into the housing market. As a result we just don't have as much household formation as we would normally have. We don't have as many people leaving their parents' homes to buy or rent a home. We don't have a lot of people just renting a home, or with one roommate.

6:28 In a lot of cases we have various less than ideal housing situations where people are living with multiple roommates, living with their parents. As a result, when we look at household maintainer rates, the share of people in each age cohort that are forming their own households across Canada, that benchmark headship rate in black is much higher for all age groups, except once you get to retirees, is higher in the rest of Canada than it is in Vancouver or BC.

7:03 We have a lot of what we call suppressed households: people would really like to form their own household, but because affordability is so difficult it's just really, really hard for them to either clear the hurdle of the down payment, or even if you get a down payment together, to pass the stress test at levels of income for young people.

7:17 – Sales, Listings and Price Momentum

7:19 Brendon Ogmundson: So affordability is really difficult. Where are prices going to go from here? That's a good question. Probably going to keep rising. So the story doesn't really change much in BC. We have a lot of demand pressure, we have real difficulty getting enough supply to the market, that tends to put a lot of upward pressure on prices. And right now sales are kind of slow. We've seen pretty disappointing sales all through this year, all through last year, the slowest year for sales in BC since 2012.

8:00 And yet we haven't really seen prices have a whole lot of downward momentum. They're basically staying at very high levels, but just kind of flattening out at those levels, kind of waiting. What are we waiting for? There's a lot of pent-up demand, there's a lot of people on the sidelines kind of waiting, probably for the Bank of Canada, waiting for some catalyst to get back into the market.

8:26 We tend to see sales rebound to some average level over time, and where we're at right now is not where we're going to stay. So sales are likely going to pick up. We're expecting home sales in 2024 to be a little bit higher than 2023, which was a pretty weak year, and then have a decent 2025, kind of contingent on rates coming down. So we're probably about to see demand really pick up in the second half of this year.

8:55 What happens with prices then really depends on whether or not there's enough sellers in the market, if current homeowners are looking to move, or looking to downsize, whatever causes them to sell. At least so far, after the worst year for new listings since like 2005 last year, we are seeing new listings really pick up. So sellers seem to be in the mood to sell. That means that inventories are starting to accumulate a little bit more, still pretty far under what we like to see in terms of long run levels of total inventory.

9:36 Listings, we'd like to see them around 45,000, we're around 35,000 right now. So coming up from the depths of the pandemic where we had fewer than 20,000 listings across the entire province. So inventories are coming back, people seem to be in the mood to sell. That's helping markets remain somewhat balanced. And so what we really want to see over the next couple of years is staying in that red circle on this graph.

10:04 – Market Tightness and 2024 Price Forecast

10:04 Brendon Ogmundson: We look at measures of market tightness. We use the sales to active listings ratio, so pretty simple, divide sales by the total number of listings. As long as we're in like a 10 to 20% range, we see over time, all those little blue dots are data points in history, we tend to keep price growth in line with inflation, like between 0 and 2%. Sometimes a little higher, sometimes a bit lower, but generally we stay there.

10:33 What we don't want to see is sales really pick up and inventory just keeps getting reduced and reduced and there's not enough listings coming online, and we go further and further out on that yellow line, further to the right, where prices really start to accelerate. We've been there far too many times throughout history. So what we really need, when we talk about the need for supply, it's really the need to keep choice in the housing market abundant.

11:01 We need lots of listings so that there's a lot of choice, there's a lot of time, people don't have too much urgency when they're in the market, and therefore we are not seeing prices get really bid up. We just have normal kind of price growth. What do we expect for this year? I think we're going to have prices fairly flat. I think our forecast is just under a million dollars this year.

11:26 In April the average price in BC was about a million. I think we're going to kind of stay around that level. We're about 10% off of our all-time peak in BC as a whole. I was looking at the data this morning, Vancouver is actually about $800 above its all-time high, as of May 14th, so yesterday's prices. So prices are still very high. Even with slower sales we're still seeing prices sustain at very high levels.

11:56 So that's kind of where we're at. Affordability is stretched, it's not likely that prices are going to come down very much, and indeed there's a lot of demand on the sidelines that could put some real upward pressure on prices.

12:11 – Why Demand-Side Housing Policies Failed

12:11 Brendon Ogmundson: What can we do about this affordability problem? How can we finally address our affordability issues across BC? Well, what we've tried to do in the past is a whole bunch of different policies aimed at demand. So whether that's on the mortgage side with things like the stress test or the minimum qualifying rate, things that really restrict the ability of households to qualify for mortgages. And then on the provincial side we've mostly done things like taxing stuff that's not that important.

12:50 So we had the foreign buyer tax in 2016, had a temporary impact. We had a vacant home tax in Vancouver, and then a speculation and vacancy tax in most of BC. Didn't really make any difference at all. It affects fewer than 1% of households, actually quite a bit lower than that. We have a flipping tax now, we actually have both a federal and a provincial flipping tax.

13:17 So we've taxed a whole bunch of things, and we tried to restrict people's ability to get mortgage credit. And what happened? Prices doubled. So it's really difficult to say that housing policy in BC since about 2010 has been successful in any way. The most charitable you can be to housing policy is that perhaps there's a counterfactual where if we didn't have all those policies maybe prices would have gone up 150%.

13:54 I'm not sure. But what I know you can't really say is that it's worked. So we've generally been focusing on the wrong things. We've been trying to fight demand, trying to reduce demand, in a market where demand is relentless, and as a result prices have gone up a lot. So when we think about affordability, what are the things we need to see change? There's really three components of affordability.

14:24 There's incomes, right? If you make more money you can afford more house, and your mortgage payment is a lot less of a burden if your income's rising. So what are the trends in incomes in BC? We have to increase incomes. Mortgage rates are of course really important, where are mortgage rates going to head? And then home prices. What do we think is going to happen with home prices?

14:48 How can we at least control the rate of price growth, so we're not seeing prices kind of spiral upward and upward over very short periods of time? So first, incomes. Household incomes in BC.

15:05 – Household Incomes and Weak Productivity

15:05 Brendon Ogmundson: So after tax, in real inflation adjusted terms, the average household income for economic families is like $117,000, pretty similar in Vancouver as well. It's on par with Toronto. You'll often hear that incomes are low in BC or in Vancouver. It just isn't true. They're looking at the wrong data. Household incomes for economic families, the type people tend to form households in, are on par with Toronto. They're lower than Calgary.

15:36 Income growth though has been somewhat slowing, at least in BC. From 2000 to 2010 it grew at about 20%, again after tax, inflation adjusted. That slowed to about 15% gains in the next decade. Vancouver was a little bit flipped. Toronto has been pretty stagnant. Calgary of course had outsized gains in the 2000s because of the oil sands, they've really slowed as well. So incomes are rising very, very slightly, a little less than 2% a year.

16:13 And we're kind of not really helped by the state of the economy. So one way obviously that we can see incomes rise is if economic growth is really strong and that's putting pressure on wages, or we're seeing really strong productivity growth and wages are really rising and we're sort of producing things really efficiently and reaping those gains. Unfortunately what's been more true in Canada is that our living standards, at least as measured by real GDP per capita, so how much do we make in Canada compared to the number of people that live here, that's been falling for a while.

16:49 So our living standards are coming down. So if we're thinking maybe we can earn our way out of this affordability crisis, something is really going to have to change in a pretty short period of time for that to be true. Same is true in BC, where the economy has obviously been slowing down over the past year and a half. Normal growth for BC is about two and a half percent.

17:13 We've been running at 1.6 in 2023, probably going to be at a similar pace in 2024. So we're in a slow growth environment, not surprising given where interest rates are. I think that growth is actually a little better than we would normally expect given how tight monetary policy is. But generally we're in this kind of, at least for the next year, a kind of slow growth environment.

17:38 And we've kind of been there for a while. If we think about real GDP per capita growth over the last decade, outside of the pandemic where we had some weird skewness in the data, we've had really low growth in terms of GDP per capita and really low labour productivity. Why do we care about it? You probably hear people talk about productivity all the time. Well, how much you earn, how much stuff we make, the income we earn in Canada or BC is really a product of two things: how many people are working, and how good they are at their job.

18:15 Like, how much stuff can they produce with each hour of labour? So GDP is, do we have more people doing their jobs more efficiently? That's how you generate a lot of growth. So what we want, if you're a fan of Brooklyn Nine-Nine, there's a lot of Captain Holt being obsessed with efficiency and productivity. That's what we really need in BC to increase incomes, is just something to get our productivity up, so we're earning more with each hour of labour input, and we're getting more and more output.

18:45 How do we do that? No idea. The economics profession has been struggling with this idea for 40 years. You'll usually hear us say something like, we need more investment in capital and we need more innovation and we need R&D. We've done a lot of things in the past 20 years to try and boost those factors, probably not enough. I'm sure there's more we can do, but we haven't really cracked this problem in a long time.

19:13 We're probably not going to fix it in the next few years. So eventually growth is going to pick back up to trend, but we're probably not going to be able to grow our way out of this problem in terms of income.

19:22 – Bank of Canada Rates and Core Inflation

19:26 Brendon Ogmundson: So that leaves interest rates. What can we expect on rates? I think everyone is probably fascinated whether or not the Bank of Canada is going to cut rates, and when are rate cuts coming. So far, if you had to grade the Bank of Canada on their monetary policy response so far, you could give them a decent grade. Normally, whenever you see inflation spike to really high levels, like going back a hundred years, normally what you see is a recession.

19:55 So those orange bars are all recessions, and you see normally when we get really high inflation it takes a recession to bring it back down. This time around, with the Bank of Canada tightening rates, we've managed to cut inflation by more than half with not a whole lot of cost. We weren't in a recession, 2023 growth was kind of slow, it's picked up at the start of 2024, and we're not really even losing jobs.

20:18 The unemployment rate is up, but mainly because our population growth is so high and our job growth just can't keep up with it. So the unemployment rate is a little bit up from an all-time low, but generally we've had this sort of soft landing where we've managed to bring inflation down without a whole lot of economic cost. And not really anyone thought that we were going to be here.

20:43 And inflation is coming down maybe a little faster than expected, especially when we look at the things the Bank of Canada really cares about, core inflation, which they measure with the blue and yellow line here, CPI trim and CPI median. And those measures over like the last three month basis, so really looking at the most recent kind of momentum in inflation, it's been really soft. We're talking like one to one and a half percent inflation, so well under what the Bank of Canada wants inflation to be, like 2%.

21:16 And even when we look at what's driving inflation, even on a 12-month basis, it's really all about shelter costs. So if we strip out shelter costs, and that includes the cost of renting a home, the cost of home ownership which are mostly mortgage interest rate costs, and home prices, when we strip out those shelter costs we're actually seeing inflation that's running at about one and a half percent over the past 12 months.

21:48 So already well below the bank's 2% target. Is it fair to take out shelter costs? Not always. So you can get in some trouble doing this type of analysis and just taking out all the stuff that you don't like. But in this case, if we're seeing shelter costs running at like 7% because the housing market was massively overheated, demand was really high, it was pushing prices much higher, that might be a problem for monetary policy.

22:17 That might be a situation the Bank of Canada would want to keep rates high to quell that demand. That's not what's happening right now. We're seeing shelter costs rise for really three reasons. One, the Bank of Canada's own policy. Increasing their overnight rate increases mortgage rates, that obviously, it's accounted for in inflation, so just mechanically drives inflation higher. The other is that we just don't have enough supply, so either the home ownership market or the rental market, we have a real big supply deficit.

22:48 – Supply Deficit, Immigration and Rents

22:51 Brendon Ogmundson: So even with low levels of sales we haven't seen much movement on prices. And then lastly, we're pushing a lot of demand into the rental sector because of our immigration policy. So on the one hand we have the federal government targeting half a million new permanent residents each year, and then for a long time they totally took their eye off the ball on the number of non-permanent residents that were coming into the country as well.

23:20 So that's temporary foreign workers and international students. That number was huge, and those are all people that tend to rent. The good news is that rents are already starting to come down, or at least really flattening out. So we had a huge spike in rents because of all that pressure on the rental sector. We seem to be seeing rents softening, especially for typical investor product like one bedroom apartments, at least according to rentals.ca data.

23:49 Maybe it's down 5% in Vancouver, only up like 2% in Victoria and Burnaby, just generally a little softer than it has been. And we're going to see a lot less demand for rents, because the federal government now is trying to get the share of non-permanent residents down from about six and a half percent of the population to about 5%. Doesn't sound like a lot, but that's a swing of about a million people.

24:20 So instead of, like in 2023 we had over 800,000 net non-permanent residents coming to Canada, to get that target down to 5% we're probably going to have to see net outflows of non-permanent residents of about 100, 200,000 per year. So that really should take a lot of pressure off, and as a result a lot of that shelter inflation should start to really ease, which leaves us with inflation that's already running below 2%.

24:48 So should the Bank of Canada be cutting right now? I would say probably yes. And there's a real danger if they don't that, instead of this somewhat miraculous soft landing that they've engineered thus far, if they leave rates too high we could start to see some more cost to the economy. And by cost, what I really mean is lost jobs. So we don't need to leave the overnight rate at 5% where it is now for like another year.

25:19 If they did so we would probably undershoot the bank's 2% target, which they don't want either, and at the cost of unemployment rising like a point or a point and a half higher than it needs to be, which means people losing their jobs. So there's a really strong argument right now that the Bank of Canada's in danger of being a little bit behind the curve, that they should start cutting rates, given that if you take out shelter costs inflation's not really much of an issue right now.

25:46 What do markets think? The probability in March of a rate cut in June was like 80%, some days it was much higher. That's been slowly, steadily falling. Got some decent US inflation data this morning, that could change the discussion a bit. Right now markets are priced in like a 40% chance of a cut in June. If not June it's almost certainly going to be July. We'll get CPI data in the next few days, that'll be a big clue to what the Bank of Canada is going to do as well.

26:23 I still think that they should be cutting rates three to four times this year. Markets don't think so. We'll see where they end up. What we do know is that the bank wants its overnight rate over the medium term to be in this grey neutral range. So the Bank of Canada will tell you they think the economy is at its happiest when their overnight rate is between 2.25 and 3.25.

26:47 So we know they're heading at some point to 2.75, the midpoint of that range. It's just really a matter of when and how fast.

27:01 – Five-Year Fixed Rates and Bond Markets

27:01 Brendon Ogmundson: Interestingly, despite the fact that the bank has done nothing, five-year fixed rates are absolutely plummeting since really late 2023. So fixed mortgage rates move entirely based on the expectations of traders, and since the end of 2023 those bond traders have really aggressively been expecting that central banks in both Canada and the United States are going to be cutting rates sometime this year. As a result, a five-year fixed rate that was over six percent back in like the fall of 2023 right now is about 5 percent.

27:42 So we've seen a really significant decline in rates. Unfortunately that might be as low as five-year fixed rates go. So if you're in the market for a fixed mortgage rate, they might be as low as they're going to get. So if you remember, the Bank of Canada wants its overnight rate, it's currently five, they want it to be 2.75.

28:05 If we just kind of build up from there, because all interest rates are somewhat tied to the overnight rate, if we just look at kind of average what we call spreads, the difference between different terms of bonds and the overnight rate, and add in a profit margin for mortgages, that gives us a neutral or a long run five-year fixed rate of 5.1%. So if the Bank of Canada is at 2.75, the five-year fixed mortgage rate that makes the most sense long term is about 5.1.

28:35 That's where we are right now. So the way to interpret that is that markets have already priced in essentially two years of rate cuts by the Bank of Canada. And even as the Bank of Canada starts cutting, we're not likely to see much more movement in terms of fixed rates. This could be as good as things get. So again, on our equation, incomes are probably not going to grow very quickly, at least in the next couple of years, or maybe we'll solve our productivity issues.

29:05 – What Drives Home Price Growth

29:05 Brendon Ogmundson: Five-year fixed rates are down already but they're probably about as low as they're going to get. So that really leads us to prices. And so for prices we'll look back a little bit in time to see, what can we do to not bring prices down? No one wants home prices to crash. Some people do. But we want home price growth to slow. So what drives growth in home prices?

29:34 I will not go in deep on this graph, don't worry. This is just some work we did to sort of allocate what was driving home price growth over the past, in this case from like 1980 to 2020. And you can see, sometimes it depends on the year, depends on what's happening. Sometimes it's because supply is really short, sometimes demand is really overheating, sometimes mortgage rates are up or down, whatever it is.

30:00 And we kind of decompose what is one of the most important drivers, and it tends to vary. It's not always the same story, it's not always a supply problem, it's not always a demand problem. But over time we can see that the big factors are things you would expect. So demand is really important for home prices, mortgage rates are really important for home prices, price expectations. Obviously if people think prices are going to rise that tends to spur them to want to get into the housing market.

30:28 We don't really have any control over any of those things. So on the demand side of things, if the economy is doing really well, if income growth is really strong, that's something that we want, it's not something we want to tamp down on. When population growth is very strong, we have very little control, especially at the provincial level, on any of these. We have no control over mortgage rates, they're entirely decided by central banks and global bond investors.

30:58 What we can kind of control is supply, which is why for years we've been talking about supply, because it's like the one thing that governments can actually control a little bit. The private sector still builds nearly all of the housing, but at least we can do some things with regulations and incentives to encourage some development, and types of development through zoning policy. And on that we're doing pretty well lately.

31:32 – Homes for People Supply Plan

31:32 Brendon Ogmundson: After doing nothing but demand side policy for a decade, we've decided to switch and start really focusing on supply. And boy, the province has rolled out a lot of supply policy over the past year. Seems like they had a new announcement like every week for a while. But it's all the stuff that economists and experts have been talking about or asking for for a very long time.

31:55 So, rezoning single family homes to multiplexes, and speeding up permitting is really, really important, high density around transit, which just makes sense, that we haven't done very well for a very long time. So all of those things are in this giant suite of policies that they call their Homes for People plan. They think that they're going to maybe be able to complete about 550,000 units over an unspecified 10-year window.

32:28 If you think that 10 years starts right now, here's what the impacts might be. So 550,000 completions in 10 years is about 250,000 more than is kind of currently slated, or what the baseline might be. If we can do that, and we'll get into whether or not that's going to be possible, then it would have some pretty major impacts. So if we look at a counterfactual baseline in blue, if prices just keep growing at five to six percent that means they double essentially every decade.

33:03 And at our kind of level of listings and expected sales and mortgage rates and all the things that go into our model, prices kind of grow at that historical rate if you just let things go without any change of policy. With the Homes for People plan, if they can build all of that, we would start to see impacts on home prices by 2030ish, again if they started like last year.

33:32 And prices would really start to flatten out, maybe bend a little bit lower in the mid 2030s. On affordability, again our whole kind of prices, mortgage rates and incomes, with some assumptions on where mortgage rates will be long term and 2% income growth, that means that we can undo about half of that really large increase in our affordability index that happened in 2021. We can undo about half of that by like 2035.

34:03 So the lesson here: demand works super fast. You can see how quickly the demand shock during the pandemic, with near zero interest rates and a huge amount of home sales, that caused affordability to jump from like 40% of income for a mortgage payment to like 60% in like a year. And it might take over a decade just to undo half. Supply is very slow, demand is very fast.

34:32 That's why we need to work faster on the supply side, and we should have been doing a lot of the things we're doing now 10 years ago.

34:39 – Construction Labour and Productivity Limits

34:42 Brendon Ogmundson: Can we build that much housing? Going to be difficult, for a couple of reasons. One, obviously, to build nearly double the amount of homes that we normally build will require a lot of extra workers. Right now about 8% of the workforce is in construction. The most that's ever been is like nine and a half percent. So we're going to have to scale up the number of people working in construction, but we're going to have to do so at a time when about a fifth of construction workers, or people in trades, are over 55.

35:21 So we're likely to see quite a few people retiring in the next 10 years when we need to be building. And our productivity is pretty low. Remember we talked about productivity being really important, if we can build more stuff with each hour of labour we'll be better off. Our productivity in the construction sector has been falling for the last couple of years, and before that was pretty flat, even lower than the weak productivity across all other sectors.

35:48 And if we're going to lose a bunch of experienced workers that's going to get worse. If you replace someone who's 50 that really knows what they're doing with someone who's 20 who is just learning, their productivity is not going to be the same. So we're going to have to figure out some combination of labour, capital, and doing things differently and more efficiently, to get these units completed a lot faster.

36:13 Unfortunately some metro governments didn't get the memo that we are trying to build things, and places like Metro Vancouver have massively increased their development charges in the last few years, as much as like 10 to $20,000 a door depending on where you're building and what type. That's super not helpful for getting things done. So while we are seeing some really good things on the provincial and federal side, not everyone is kind of on the same page.

36:50 Ultimately what's going to be really important is just, are we completing enough housing? The only way we're going to know this is if we're seeing those units complete year after year. To hit our targets we need to be completing about 60,000 units every single year. The most we've ever completed is 42,000 units in a single year, so we have some way to go. We're not close to there in 2024 so far, but I imagine hopefully things will really ramp up and we'll start to see those units completing.

37:26 All right, that was a lot of stuff, really all about affordability. Affordability is obviously difficult. In order to fix it we need some combination of just slowing price growth so that prices aren't doubling every decade. We can get there partially through income and rates, but they're kind of going to do what they're going to do. The one thing that we really hope to do is that all these supply side policies that we've implemented work and slow price growth, allow incomes to catch up, maybe we can make a difference on affordability.

37:56 Unfortunately it's going to take quite some time. All right, I'm happy to answer questions if people have questions.

38:03 Ryan Grant: Oh, that was really awesome there Brendon, super packed presentation. I'm actually going to have to rewatch some of it just to really think about those areas. Yeah, holy. Currently we don't have any questions yet, we'll give people another few seconds to get some stuff in. Here's one: what do we see in other economic areas for how they're doing things in terms of housing?

38:28 – Q&A: Housing Markets Beyond BC

38:39 Ryan Grant: Or, yeah, is there other strategies? It looks like they want to know about the housing prices, to help reduce the mania in the markets, right?

38:50 Brendon Ogmundson: Pretty much the same everywhere. So we're not the only country or area that had this massive sort of redistribution of housing demand outwards during the pandemic. If you look at what happened with prices in and around Toronto, prices were up like 80% in a lot of those markets during the pandemic and have come down, but not all the way. And so everywhere is sort of trying to do the same thing.

39:18 Ontario has pretty aggressive building targets as well. Alberta is a little different, they're a lot more favourable to landlords, so we're seeing a lot of investment demand there right now. They have a real boom and bust, for obvious reasons, kind of economy. But they've also generally done a better job of just building enough housing. So in terms of affordability Alberta is one of those markets that's doing a lot better than Ontario or BC.

39:50 But even markets like Atlantic Canada have seen prices really rise. So it's been pretty difficult everywhere, and the same is true in the United States. Areas like Montana and Idaho even had huge price spikes as people funnelled out of California into those markets during the pandemic. So nowhere, nowhere has been really safe for affordability.

40:15 Ryan Grant: Yeah, unfortunately. Okay, well that looks like that was all the questions, and we have run out of time there, we're on to the next presenter. So thank you so much Brendon for coming on, and I'll have to rewatch this video again, take notes.

40:34 Brendon Ogmundson: Yes, thank you so much for the invite. Have a great conference.

40:39 Ryan Grant: Yes.