In my introductory post on 'Life in Lotusland' the theme was appreciation of our choice to live in our region. In this post, I would like to discuss some of the key milestones or watershed events that I think have contributed to transforming our region from 'The Village of Vancouver'* to its emergence as one of the top places in the world to live along with the challenges of housing affordability. Many will want to debate the outcomes of these events but my intent is simply to document what did happen and its subsequent impact on our region’s real estate markets.

Back in April 17, 1973, after much controversy, amendments and protest (primarily from farmers who owned land near urban centre’s hoping to cash in on future re-zoning), our provincial government at the time enacted a piece of legislation called the Land Commission Act and by extension the Agricultural Land Reserve (ALR). This Act effectively served to protect valuable productive agricultural land that could be threatened by urbanization and land development. It was a piece of legislation that strived to strike the balance between growth and sustainability. While the ALR was province wide it did shape our region’s future development and will continue to do so.

I think one of the ALR’s biggest impacts has been not only the intended conservation of valuable farmland but it has also served to limit the urban sprawl effect we see in so many major North American metropolitan areas. While we do have our share of “subdivisions”, the intensity has been muted because the redevelopment of land in our region to highest and best use has been shaped with the ALR in mind. The obvious outcome of the ALR has been to limit the land supply for development but it has also served to help shape our region along the lines of rapid transit oriented growth and has allowed us to keep our local food supply offerings intact. Consequently, our region has developed around transit hubs and densified regional town centres which is viewed by most urban planners in North America as one of the key features of our Region’s livability.

For me, the event that saw the rise of Lotusland in getting the world’s attention, was our decision to host Expo 1986. Expo 86 in terms of the numbers of attendees (estimated at 22,111,578) and the promotion of our region to the world was a success.

Having grown up in Vancouver, the rezoning and sale of the Expo lands in preparation of the World Exposition stand out as the seminal moment when those of us who lived here knew things had changed forever. From a real estate perspective, the years following Expo 1986 have marked the beginning of the long-term climb of our real estate prices.

The next big event which impacted Lotusland's real estate market was the handover of Hong Kong from British oversight to Communist Party Rule by mainland China in 1997. The people of Hong Kong having lived under a democracy were concerned about the hand over. This led many, prior to 1997, to relocate or buy some real estate as a safe haven investment in our region. Lotusland had become, and continues to be, a desired destination for many people from the Pacific Rim region.

2001 saw the election of the BC Liberals in the province and the introduction of a platform of significant personal tax reduction and stimulative tax and regulatory policy. These provincial policy decisions happened to coincide with macro level events such as, declining mortgage interest rates and a bull market in commodities. This combination of events strenghtened our region’s economy and in turn our real estate market. By 2003 our real estate market began a sustained upward price trajectory only briefly interrupted by the 2008 global financial crisis.

The 2008 global financial crisis hit the world’s economies hard including our own economy. Most, if not all governments, responded by enacting policy measures to prop up or stimulate growth. One of the key policies was a reduction of interest rates. Low interest rates and stimulative policy measures had a number of impacts around the globe. One of the most evident impacts was the search for yield by investors as traditional low risk investments often had negligible yields. As a result, asset classes like real estate, in prime locations, began to attract the attention and capital of investors the world over. While our region’s real estate market saw a moderate decline in 2008, most people do not realize that 2009 was one of the strongest years in terms of the number of sales (not necessarily price appreciation) in our region’s history. Some of the uptrend in real estate sales in 2009 preceded the hosting of the 2010 Winter Olympics

The hosting of the 2010 Winter Olympics saw Lotusland capture the world’s attention once again. The USA Today in the build up to the Olympics, as many of you might recall, dubbed us "The Super Model of North American cities".

Our weather even helped in the promotion. Instead of the usual February rainfall, many days during the Olympics featured sunny backdrops to a region in full “Super Natural BC” glory. I can remember watching one of Stephen Colbert's shows (taped in Vancouver during the Olympics) and the day was clear, mild and sunny with a Super Natural backdrop that would help to sway anyone watching that this might be one of the most beautiful places on earth.

In the past few years, a combination of continuing global trends since 2008 coupled with domestic market demand and accommodative fiscal policy, has supported a steep escalation of prices in our region.

Our region is by no means alone in the impact of these foreign capital inflows into real estate markets. Many desirable western and emerging market metropolitan real estate markets were impacted by these trends.

More recently, since 2015, we have seen continued low interest rates, our currency depreciation relative to other major currencies, the continued search for yield and security of capital by global investors, the 2016 Chinese Yuan deprecation, and in the case of Mainland China a desire by those individuals to get their wealth and families out of a communist country.

Further, the impact of these global trends on the Vancouver and Toronto regions, in my estimation, were exacerbated by our Federal government’s lack of enforcement of our existing, banking, mortgage financing rules, immigration and tax laws to curb speculative activity in our real estate markets.

Specifically, one factor in our region’s steep real estate price escalation in the past couple of years was commented on by Philip Cross noted in a recent Financial Post editorial titled “Ultra Easy Money, Ultra-risky debt”. The surprise decision by the Bank of Canada (BOC) in January of 2015 to further lower interest rates appears to have unintentionally contributed to the significant price escalation in Vancouver and Toronto housing markets. Between August 2011 and January 2015 house prices in Vancouver rose a modest 4.9% but after the BOC announcement prices surged 46.4%**. Toronto saw increases in the same periods of 21.2% and then a 54.6% respectively**.

From a Canadian perspective, demand in our region has also been driven by solid economic growth and in migration population growth from other areas of Canada.

Combined with these broader trends, at the municipal and regional level the inability or unwillingness to aggressively increase housing supply and housing types, plus a lack of leadership by the Province, we now find ourselves in a market that has significant housing demand and long-term housing supply constraints.

*Remember the late ABC broadcaster Jim Mackay’s comment regarding the Vancouver Whitecaps run to win the now defunct NASL Soccer Bowl 1979 championship.

**The price growth figures in Philip Cross’ article appear to be for all property types as detached single family homes would have significantly outperformed condo’s and townhouse price escalation in these time frames.

E.& O.E.- I make every reasonable attempt to make that the information is correct and that my spelling and grammar are checked.

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Well here it is, in celebration of my new web platform the creation of my blog on a sunny day in July. Those of you who know me, know that I have many opinions and thoughts on all things Lotusland. I will say this, that when I look back on my life I am lucky that my parents decided to make Lotusland (Lotusland being our region) their home and I in turn have the chance to be born and live my life here.

I am open to thoughtful and respectful commentary and dialogue. Many of you may choose to agree or disagree, that is your right.

I am not 100% certain where blogging about Lotusland will take me but again that is point about the “Life in Lotusland theme”. It will give me a platform to talk about real estate and life in general in our region, but more importantly, gives me a platform to put real estate (as I see it) in the context of the people and the places of Lotusland. For most of us this is how real estate translates into meaning in our lives.

I have been in financial services field virtually all my entire working life and in my opinion real estate is the most democratic of all assets people can acquire. Desirability and livability of a community (amongst other factors) is one of the main drivers of "confidence" in a real estate market. The fact that our real estate is in such demand is ultimately a confidence vote on our region.

Within reason people can choose to live anywhere in Canada or even abroad depending on their circumstances and their desire to do so. Why is it that such a small percentage of the earth's total land base is valued so highly by people?

Which brings me to the theme of my first blog piece on the Lotusland life.

One observation I make is that people who have been born and raised here can have a tendency to take the place for granted and often feel most impacted (positively or negatively) by the changes our region has experienced over the past several decades.

Until I began to travel abroad (and lived elsewhere in Canada for a few years), I was one of those Lotuslanders who could not see "the forest from the trees" (pardon the pun) when it came to the place I called home.

Like many people I knew this was a special place but became complacent in embracing Lotusland. Intellectually, as part of my undergraduate studies at UBC, I had studied climatology and geography so I knew things like only about 3% of the earth's land mass has a climate and biosphere like ours (see Koppen Climate Classification System).

Having read and studied Ernest Callenback's Ecotopia at UBC in the 1980’s I became attuned to "super natural" aspect of the region.  Knowledge aside, I continued to be frustrated by things like it rains a lot. Given my chosen field of study I needed to remind myself that "duh" we live in a temperate rainforest. Complaining about rain in a rainforest is like being pissed off at how hot and dry it gets in a desert.

Complacency for me also took the form of not going to the places and not participating in the activities that make Lotusland amazing as often as I should have. Making excuses, like I'll go to Stanley Park next week, or not watching the sunset on your favorite beach or lookout point. As a kid growing up I used to Stanley Park every weekend with my Mom and my Nana (who lived near Stanley Park in West End). Those trips and memories are some of fondest of my entire life. Stanley Park is one of Lotusland's sacred places.

What has always fascinated me the is contrast of us native "Lotuslanders" complacency and attitude was the attitude of people who have moved here by choice and how they feel about Lotusland. At the heart of this lies the reason our region has changed so rapidly and evolved (I think for the better) to the place it is today and how many of the original Lotuslanders struggle to accept we have been "discovered by the world".

Much of region's stunning growth and attraction to others can be partially blamed on the excellent marketing by ourselves, over many decades, of the brand known as "Super Natural" BC with Lotusland at its epicenter.  The counter refrain which we constantly hear from many "locals" is look at the problems this has brought with it, housing affordability due to global demand, being one of the most acute socio-economic concerns.