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> I don't know about Vancouver's specific problems. Why are the construction costs so high there? There's no real reason why construction costs are high. As th
by Tiktaalik 6y ago
> I don't know about Vancouver's specific problems. Why are the construction costs so high there?
There's no real reason why construction costs are high. As the amount of construction increases, the available labour pool decreases, and labour costs accordingly increase. There is always lots of construction going on. More highly trained trades would help, but easier said than done.
If anything it's more that construction costs are artificially low in the USA since there is a class of illegal immigrant labour which can be exploited and paid low. That does not exist in Canada.
- triceratops 6y agoThat just sounds like demand is outstripping supply. As you said, there's still a lot of construction going on but it's having no effect on prices. Either those developers are going to lose their shirts eventually by overbuilding (bonanza for buyers!) or there really are that many buyers willing to pay those prices. It might be worth digging into why Vancouver has so much housing demand. It's a stunningly beautiful city, but the local economy doesn't seem to correlate with the price of real estate. There are no FAANGs paying senior engineers $400k, so why are people spending so much money?
- Tiktaalik 6y agoYeah an important aspect of supply and demand discussions in housing discourse is that demand is liquid and can be effectively infinite because supply creation is constrained by literal real world factors (ie. how many labourers are there, how fast can home designs be developed and reviewed, etc). So as I said it actually becomes more difficult to build the more you build. Vis a vis labour demand there's also competition from non-residential construction projects (eg. Amazon building a big warehouse somewhere, dam construction, bridge construction etc).