thoughtful real estate. U D I L U N C H E O N 2 0 1 9 looking - - PowerPoint PPT Presentation

thoughtful real estate.

V P, I N T E L L I G E N C E

Andy Ramlo

U D I L U N C H E O N 2 0 1 9

looking beyond the headlines & charting our way forward.

2

1 economics & politics

demographics, demand & supply the squeezed generation

road map

2 3

U D I 2 0 1 9

M Y T H M Y T H

M Y T H

01

the millennials are fleeing the city of vancouver

population by age

C I T Y O F V A N C O U V E R

24,615 22,900 23,010 28,270 44,150 63,475 61,710 48,915 43,890 46,890 46,845 42,100 37,150 32,760 20,835 16,630 13,115 8,615 4,140 1,220 250

0-4 5-9 10-14 15-19 20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65-69 70-74 75-79 80-84 85-89 90-94 95-99 100+

2016

24,615 22,900 61,710 48,915 43,890 46,890 46,845 32,760 20,835 16,630 13,115 8,615 4,140 1,220 250 61,710 61,710 44,150 23,010 28,270 44,150 24,615 22,900 48,915 43,890 46,890 46,845 42,100 37,150 32,760

the millennial ge illennial ge

44,150

the millennial generation born 1986 to 2005,

44,150

the m nnial generation born 1986 to 2005, nnial generation born 1

48,915

the millennial generation born 1986 to 2005,

48,915 43,890

the millennial generation born 1986 to 2005,

43,890 46,890

the millennial generation born 1986 to 2005,

46,890 46,845

the millennial generation born 1986 to 2005,

46,845 42,100

the millennial generation born 1986 to 2005,

42,100 37,150

the millennial generation born 1986 to 2005,

37,150

ag aged 11–30 in 2016 aged 11–30 in 2016

42,100

aged 11–30 in 2016

37,150

aged 11–30 in 2016

37,150 32,760

aged 11–30 in 2016

32,760

24,615 22,900 23,010 28,270 44,150 63,475 61,710 48,915 43,890 46,890 46,845 42,100 37,150 32,760 20,835 16,630 13,115 8,615 4,140 1,220 250

0-4 5-9 10-14 15-19 20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65-69 70-74 75-79 80-84 85-89 90-94 95-99 100+

population by age

C I T Y O F V A N C O U V E R 2016

63,475 61,710 48,915 43,890 46,890 46,845 42,100 37,150 32,760 20,835 16,630 13,115 8,615 4,140 1,220 250

2016 2016

24,615 22,900 23,010 28,270

2011

44,285

age group change = -135 (-0.3%)

24,615 22,900 23,010 28,270 44,150 63,475 61,710 48,915 43,890 46,890 46,845 42,100 37,150 32,760 20,835 16,630 13,115 8,615 4,140 1,220 250

0-4 5-9 10-14 15-19 20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65-69 70-74 75-79 80-84 85-89 90-94 95-99 100+

population by age

C I T Y O F V A N C O U V E R 2016

63,475 61,710 48,915 43,890 46,890 46,845 42,100 37,150 32,760 20,835 16,630 13,115 8,615 4,140 1,220 250

2016 2016

24,615 22,900 23,010 29,095

age cohort change = +15,055 (52%)

2011

population by age

C I T Y O F V A N C O U V E R

24,615 22,900 23,010 28,270 44,150 63,475 61,710 48,915 43,890 46,890 46,845 42,100 37,150 32,760 20,835 16,630 13,115 8,615 4,140 1,220 250

0-4 5-9 10-14 15-19 20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65-69 70-74 75-79 80-84 85-89 90-94 95-99 100+

2016 2011 net 5-year cohort change

C I T Y O F V A N C O U V E R

cohort change by age

0-4 5-9 10-14 15-19 20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65-69 70-74 75-79 80-84 85-89 90-94 95-99 100+

C I T Y O F V A N C O U V E R

cohort change by age

net loss net gain

2011_2016

2001_2006 1996_2001 1991_1996 2006_2011

• 10,000
• 5,000

5,000 10,000 15,000 20,000 0-4 5-9 10-14 15-19 20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65-69 70-74 75-79 80-84 85-89 90-94 95-99 100+

deaths deaths

320,000 240,000 160,000 80,000 80,000 160,000 240,000 320,000 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100

GenX (33–52) 9.9 million (27%) Baby Boomers (53–72) 9.4 million (25%)

37.2 MILLION RESIDENTS

C A N A D A 2 0 1 8

population by age

Millennials (13–32) 9.5 million (25%)

1981 1985 1991 1996 2001 2006 2011 2016

61% 59% 59% 56% 55% 49% 47% 40% 26% 24% 23% 21% 19% 15% 14% 10% 10% 9%

20–24 years old 25–29 years old 30–39 years old

C A N A D A

proportion of kids (still) at home?

61% 59% 59% 56% 55% 49% 47%

20–24 years old 25–29 years old 30–39 years old

1981 1985 1991 1996 2001 2006 2011 2016

26% 24% 23% 21% 19% 15% 14% 10% 10% 9% 40% 26%

58% of millennials were 58% of mil 58% of mil 58% of mill 58% of mill lennials were lennials were s were s were still living at home in 2016 still living at hom still living at hom still living at hom still living at hom still living at home in 2016 still living at home in 2016 in 2016 in 2016 (and 6% of GenX)

(and 6% of Gen (and 6% of Gen d 6% of GenX d 6% of GenX

1981 1985 1991 1996 2001 2006 2011 2016

61% 59% 59% 56% 55% 49% 47% 40% 26% 24% 23% 21% 19% 15% 14% 10% 10% 9%

20–24 years old 25–29 years old 30–39 years old

C A N A D A

proportion of kids (still) at home?

61% 59% 59% 56% 55% 49%

20–24 years old 25–29 years old 30–39 years old

1981 1985 1991 1996 2001 2006 2011 2016

23% 21% 19% 15% 14% 10% 10% 9% 49% 47% 26% 24% 23% 21% 40% 26%

58% of millennials were 58% of mil 58% of mil 58% of mill 58% of mill lennials were lennials were s were s were still living at home in 2016 still living at hom still living at hom still living at hom still living at hom still living at home in 2016 still living at home in 2016 in 2016 in 2016 (and 6% of GenX)

(and 6% of Gen (and 6% of Gen d 6% of GenX d 6% of GenX

the next decade will see more than 3.8 million the next de the next de t decade t decade cade will se cade will se will see more will see more

• re than 3
• re than 3

than 3.8 million than 3.8 million illion illion

47%

the next decade will see more than 3.8 million the next decade will see more than 3.8 million the the the next de the next de t decade t decade cade will se cade will se will see more will see more

• re than 3
• re than 3

than 3.8 million than 3.8 million illion illion 58% of millennials were the next decade will see more than 3.8 million 58% of millennials were 58% of mil the next decade will see more than 3.8 million 58% of mil 58% of mil the next decade will see more than 3.8 million 58% of mil 58% of mill the next decade will see more than 3.8 million 58% of mill 58% of mill the next decade will see more than 3.8 million 58% of mill lennials were the next decade will see more than 3.8 million lennials were lennials were the next decade will see more than 3.8 million lennials were s were the next decade will see more than 3.8 million s were s were the next decade will see more than 3.8 million ate late llennials, & another 531,000 GenXers contemplate millenni millenni ennials, & a ennials, & a , & anot , & anot nother 53 nother 53 531,000 GenX 531,000 GenX 1,000 GenXer 1,000 GenXer ers cont ers cont

• ntempla
• ntemplate

58% of millennials were millennials, & another 531,000 GenXers contemplate 58% of millennials were 58% of mil millennials, & another 531,000 GenXers contemplate 58% of mil millennials, & another 531,000 GenXers contemplate 58% of mill millennials, & another 531,000 GenXers contemplate 58% of mill 58% of mill millennials, & another 531,000 GenXers contemplate lennials were millennials, & another 531,000 GenXers contemplate ennials were lennials were millennials, & another 531,000 GenXers contemplate s were millennials, & another 531,000 GenXers contemplate s were s were millennials, & another 531,000 GenXers contemplate still living at home in 2016 millennials, & another 531,000 GenXers contemplate still living at home in 2016 still living at hom millennials, & another 531,000 GenXers contemplate still living at hom still living at hom millennials, & another 531,000 GenXers contemplate still living at hom still living at hom millennials, & another 531,000 GenXers contemplate still living at hom still living at hom millennials, & another 531,000 GenXers contemplate still living at hom still living at home in 2016 millennials, & another 531,000 GenXers contemplate still living at home in 2016 still living at home in 2016 millennials, & another 531,000 GenXers contemplate still living at home in 2016 in 2016 millennials, & another 531,000 GenXers contemplate in 2016 in 2016 millennials, & another 531,000 GenXers contemplate

(and 6% of GenX)

millennials, & another 531,000 GenXers contemplate

(and 6% of Gen

millennials, & another 531,000 GenXers contemplate

(and 6% of Gen

millennials, & another 531,000 GenXers contemplate

d 6% of GenX

millennials, & another 531,000 GenXers contemplate

d 6% of GenX

millennials, & another 531,000 GenXers contemplate moving from the parental nest movi movi moving f moving f ng from the pa ng from the pa he pare he parental nes ntal nes he pare he parental nes ntal nes nest … nest 24% moving from the parental nest …

24% 23%

moving from the parental nest …

23% 21%

moving from the parental nest …

21%

moving from the parental nest movi movi moving f moving f ng from the pa ng from the pa he pare he parental nes ntal nes nest … nest nest … nest … still living at home in 2016 moving from the parental nest … still living at home in 2016 still living at hom moving from the parental nest … still living at hom still living at hom moving from the parental nest … still living at hom still living at hom moving from the parental nest … still living at hom still living at hom moving from the parental nest … still living at hom still living at home in 2016 moving from the parental nest … still living at home in 2016 still living at home in 2016 moving from the parental nest … still living at home in 2016 in 2016 moving from the parental nest … in 2016 in 2016 moving from the parental nest … in 2016 (and 6% of Gen moving from the parental nest …

(and 6% of Gen (and 6% of Gen

moving from the parental nest …

(and 6% of Gen (and 6% of Gen

moving from the parental nest …

(and 6% of Gen

moving from the parental nest …

d 6% of Gen d 6% of Gen

moving from the parental nest …

d 6% of Gen

M Y T H

01

the millennials are fleeing the city of vancouver we are swimming in millennials…

the city of vancouver has, and will likely always have, an influx

• f under-35s due to

the composition of its dwelling stock. why this matters to you:

the region’s suburbs have, and will likely continue to have, an outflow of under-35s as kids eventually move out of the house. why this matters to you:

understanding this process is important as Canada’s millennial generation will soon be its largest, and they are now entering the household formation stage of the lifecycle. why this matters to you:

M Y T H

02

#DontHave1Million

2018 residential sales

R E G I O N ? L O W E R M A I N L A N D

$33.9

$0 $10 $20 $30 SALES PRICE (MILLIONS)

to 8,409 to 16,818 to 25,227 to 33,636 to 42,047

CUMULATIVE NUMBER OF SALES

$1.0m

31,215 sales in 2018 were under $1m

2018 residential sales

R E G I O N ? L O W E R M A I N L A N D

$33.9

$0 $10 $20 $30 SALES PRICE (MILLIONS)

to 8,409 to 16,818 to 25,227 to 33,636 to 42,047

CUMULATIVE NUMBER OF SALES

Average $903,000

2018 residential sales

R E G I O N ? L O W E R M A I N L A N D

$33.9

$0 $10 $20 $30 SALES PRICE (MILLIONS)

to 8,409 to 16,818 to 25,227 to 33,636 to 42,047

CUMULATIVE NUMBER OF SALES

Median $685,000

2018 residential sales

R E G I O N ? L O W E R M A I N L A N D

$33.9

$0 $10 $20 $30 SALES PRICE (MILLIONS)

to 8,409 to 16,818 to 25,227 to 33,636 to 42,047

CUMULATIVE NUMBER OF SALES

$455,000 $605,000 $788,000 $1.16m

average of bottom 80% of sales = $629,000

M Y T H

02

#DontHave1Million #DontNeed1Million

74% of sales in the lower mainland fell below the million mark in 2018 why this matters to you: 61% of sales in the city

• f vancouver fell below

the million mark in 2018

yes, only 0.9% of detached sales in the City of Vancouver fell below the

• ne million mark (but 43% of

detached sales in the region were below one million in 2018)

why this matters to you:

• n the affordability front,

we need to better job at defining what it is and metrics used to track it. why this matters to you:

(i.e. can we please stop comparing average/median incomes to average/median sales prices…)

we have been adding more than enough supply to accommodate demand

M Y T H

03

• 10%

0% 10% 20% 30% 40% 50% 60%

• 5,000

5,000 15,000 25,000

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

housing starts & completions

L O W E R M A I N L A N D

SOURCE: CMHC, Statistics Canada, Metro Vancouver Housing Data Book

starts completions demolitions demolition rate

2018 average = 14% 2018 average = 14% 2018 average = 14% 2018 average = 14% 2018 average = 14% 2018 average = 14% 1990–2018 average = 14% 1990–2018 average = 14% 1990–2018 average = 14% 1990– 1990– 1990– 1990– 1990– 1990– 1990–2018 average = 14% 2018 average = 14% 2018 average = 14% 2018 average = 14% 2018 average = 14% 2018 average = 14% 2018 average = 14% 1990–2018 average = 14% 1990–2018 average = 14% 1990–2018 average = 14% 1990–2018 average = 14% 1990–2018 average = 14% 1990–2018 average = 14% 1990–2018 average = 14% 2018 average = 14% 2018 average = 14% 1990–2018 average = 14% 1990–2018 average = 14%

30,076 27,218 15%

4,140

housing change 1991 to 2018

L O W E R M A I N L A N D

868,293 355,787 399,806 345,934 414,672

(100,000) 100,000 300,000 500,000 700,000 900,000

Population additions Occupied Homes Completions Net Completions Occupied Homes

demolitions

• 56,462

shortfall 9,863 population additions

• ccupied

homes net completions completions

supply creates its own demand, the aggregate production necessarily precede an equal quantity

• f aggregate demand.

J E A N - B A P T I S T E S A Y

French Economist 1767–1832

T H E L A W O F M A R K E T S

say’s law: precede an equal quantity

• f aggregate demand.

supply creates its own demand, the aggregate say’s law:

46% 20% 39% 47% 53% 55% 57% 58% 56% 57% 59% 61% 62% 63% 51% 46% 20% 39% 47% 53% 55% 57% 58% 56% 57% 59% 61% 62% 63% 51%

total 20..24 25..29 30..34 35..39 40..44 45..49 50..54 55..59 60..64 65..69 70..74 75..79 80..84 85+

1996 2006 2016

the lifecycle of housing occupancy

L O W E R M A I N L A N D C E N S U S P R I M A R Y H O U S E H O L D M A I N T A I N E R R A T E S

9,863

L O W E R M A I N L A N D

868,293 355,787 399,806 345,934 414,672

(100,000) 100,000 300,000 500,000 700,000 900,000

Population additions Occupied Homes Completions Net Completions Occupied Homes

demolitions

housing change 1991 to 2018

414,672

68,738 shortfall net completions population additions

• ccupied

homes completions 56,462

@ 1996 rates

M Y T H

03

we have been adding more than enough supply to accommodate demand

if we had been adding more than enough supply to accommodate demand, basic economic theory says that there would have been downward pressure

• n prices

why this matters to you:

why this matters to you: we all have to acknowledge that we need to build an adequate supply of housing to accommodate the needs of

• ur growing and changing

population

why this matters to you: and most importantly we need to stop pitting the demand side against the supply side and work to modify both curves

2

road map

U D I 2 0 1 9

1 economics & politics

demographics, demand & supply the squeezed generation

2 3

economics & politics economics & politics

C A N A D A

growth in gross domestic product 2017

C A N A D A

4.8% 3.8% 3.1% 3.0% 3.0% 2.9% 2.9% 2.7% 2.1% 1.8% 1.2%

Alberta BC PEI Quebec Canada Manitoba Sask Ontario Nfld NB NS

economics & politics economics & politics

C A N A D A

1.75 1.88 5.34 1.99

0.0 1.0 2.0 3.0 4.0 5.0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

2019 2014 2015 2016 2017 2018 %

key rates

C A N A D A

1 2 3 4 5

B of C overnight target rate 5-yr mortgage 5-10yr Govt. bond CPI inflation

• vernight target rate

O C T O B E R 2 0 1 8

1.75% 1.75% 1.75% 1.75% 1.75%

with the overnight rate currently at 1.5%, the consensus is that we will see one more rate increase from the Bank of Canada through 2018… … and one to three more through 2019.

rate changes & purchasing power

O C T O B E R

rate changes & purchasing power

…the outlook has changed so quickly that now a move in the

• pposite direction is becoming a

real possibility – a rate cut!

growth in gross domestic product 2018

C A N A D A

2.4% 2.4% 2.3% 2.1% 2.1% 1.8% 1.8% 1.6% 1.1% 0.9% 0.0%

Alberta Quebec BC Canada Ontario Manitoba PEI Sask NS NB Nfld

growth in gross domestic product 2019

C A N A D A

2.3% 1.9% 1.8% 1.8% 1.8% 1.7% 1.7% 1.6% 1.3% 0.9% 0.8%

BC Ontario Quebec Canada Manitoba Sask Nfld Alberta PEI NS NB

1.7%

rate changes & purchasing power rate changes & purchasing power

the Bank made it clear that its decision-making would be governed by hard data on how the economy was doing — things like, are consumers spending money on cars and houses? Are businesses investing? And how is the global picture for free trade looking?

• 2%

Vancouver +41%

• 5%
• 6%

C A N A D A

SOURCE: Statisticss Canada Survey of Retail Trade, Monthly, Seasonally Adjusted

retail spending per capita 2001–2019

$1,691 $1,657 $1,833 $1,777 $1,595 $1,518

$850 $1,050 $1,250 $1,450 $1,650 $1,850 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19

Vancouver CMA Canada British Columbia

BC +50%

1.6% 1.8% 1.1%

past 12 months 297,400 previous year 321,200

• prev. 5-yr av.

200,637

employment growth

C A N A D A

SOURCE: Labour Force Survey, Seasonally- Adjusted, 3-month moving average

employment growth

B R I T I S H C O L U M B I A

SOURCE: Labour Force Survey, Seasonally- Adjusted, 3-month moving average

2.4% 2.3% 1.7%

past 12 months 60,400 previous year 56,400

• prev. 5-yr av.

39,933

employment growth

V A N C O U V E R C M A

SOURCE: Labour Force Survey, Seasonally- Adjusted, 3-month moving average

2.2% 5.3% 2.3%

past 12 months 30,900 previous year 72,400

• prev. 5-yr av.

30,134

unemployment rate 2001–2019

C A N A D A

SOURCE: Labour Force Survey, Seasonally- Adjusted, 3-month moving average

2.8% 3.2% 4.5% 7.0% 5.9% 8.7% 5.7% 3.5% 4.9%

0% 2% 4% 6% 8% 10%

Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19

Vancouver CMA Canada British Columbia Victoria CMA

growth in median weekly wages

C A N A D A

SOURCE: Labour Force Survey, Employee Wages, Seasonally- Adjusted

1.7% 3.0% 2.2%

Past 12 months Previous Year

• Prev. 5-Yr Avg.

$880 (feb. ’19) $865 (feb. ’18) $824 (feb. av.)

growth in median weekly wages

B R I T I S H C O L U M B I A

SOURCE: Labour Force Survey, Employee Wages, Seasonally- Adjusted

• 1.1%

4.7% 2.0%

Past 12 months Previous Year

• Prev. 5-Yr Avg.

$866 (feb. ’19) $875 (feb. ’18) $820 (feb. av.)

since the great recession

• f 2009, we have

experienced one of the most significant periods

• f economic expansion in

Canadian history, however… why this matters to you:

• slowing consumer spending
• normalizing housing markets
• slowing job growth
• a depressed energy sector
• international trade wars (US)
• political tensions (Canada/China,

BC/Alberta, federal, municipal… not to mention BREXIT)

headwinds of change are evident… why this matters to you:

2

2

economics & politics demographics, demand & supply

road map

U D I 2 0 1 9

1 3

the squeezed generation

demographics, demand & supply

C A N A D A

the coming demographic crunch

C A N A D A

PEI NS NB NF QC SK BC MB ON AB YK NWT NV

15.1 9.6 7.1 5.7 4.3 4.2 4.1 3.9 3.9 3.9 3.8 3.7 3.6

1971 6.6 2018 2036 3.6 2.3

components of population change

L O W E R M A I N L A N D

4,738 4,716 5,559

• 6,192
• 8,850

8,914

• 870

12,109 39,834 45,374 39,442 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 2040

net inter-prov. natural increase net immigration net intra-prov.

total population

L O W E R M A I N L A N D

1,336,881 2,168,587 2,975,323 3,379,506 4,030,012 3.1% 1.6% 3.5% 3.4% 0.9% 2.0% 1.6% 0.9% 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 2040

1.1million over the next 23 years 868,000 over the past 23…

primary household maintainer rates

L O W E R M A I N L A N D

Family (household) formation Family-rearing Empty nests

46% 20% 39% 47% 53% 55% 57% 58% 56% 57% 59% 61% 62% 63% 51% 45% 16% 34% 45% 49% 52% 55% 56% 57% 57% 57% 57% 57% 58% 50%

total 20..24 25..29 30..34 35..39 40..44 45..49 50..54 55..59 60..64 65..69 70..74 75..79 80..84 85+

1996 2006 2016

housing demand for 1.1 million more residents

POPULATION INCREASE OF 1.1 million HOMES 479,804 GROUND ORIENTED 282,433 APARTMENT 197,371 JOBS 549,129

35% 42% 34% 41% 43%

housing demand for 1.1 million more residents

POPULATION INCREASE OF 1.1 million HOMES 479,804 GROUND ORIENTED 282,433 APARTMENT 197,371 JOBS 549,129

35% 42% 34% 41% 43%

we will need to add another vancouver, burnaby, new west & richmond

housing supply & demand

L O W E R M A I N L A N D

housing starts net housing starts demolitions net new homes

25,907 21,765 18,923 16,606 25,106 8,864 23,416 9,095 30,076 25,654 22,246 19,576

• 3219
• 1208
• 2967
• 4148
• 3,844

1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 2040

18,402 25,589 22,593 13,854 13,752 11,653 10,422 15,373 15,138 16,476 19,143 18,722 17,017 18,404 19,635 21,654 22,604 22,968 22,960 20,925 18,967 16,494 20,469 7,527 20,192 11,702 24,972 24,592 24,592 19,450 19,450 19,450 17,374 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 2040

housing supply & demand

L O W E R M A I N L A N D

net new homes historical demand projected demand

18,402 25,589 22,593 13,854 13,752 11,653 10,422 15,373 15,138 16,476 19,143 18,722 17,017 18,404 19,635 21,654 22,604 22,968 22,960 20,925 18,967 16,494 20,469 7,527 20,192 11,702 24,972 24,592 19,450 17,374 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 2040

housing supply & demand

L O W E R M A I N L A N D

net new homes historical demand projected demand

18,402 18,402 25,589 25,589 22,593 22,593 13,854 13,854 13,752 13,752 13,752 13,752 11,653 11,653 11,653 11,653 11,653 10,422 10,422 15,373 15,138 15,138 16,476 16,476 19,143 18,722 18,722 17,017 18,404 18,404 19,635 19,635 21,654 21,654 22,604 22,604 22,968 22,968 22,960 22,960 20,925 18,967 18,967 16,494 16,494 20,469 20,469 7,527 20,192 11,702 24,972 24,592 24,592 19,450 19,450 19,450 19,450 19,450 17,374 17,374 17,374 17,374 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 2040

net new homes historical demand projected demand

The next decade would see an average of almost 23,000 homes needed annually to accommodate our growing and changing population… This means that starts need to be in the range for 25,000+ units annually, well below levels that currently characterize the market

if expected levels of immigration are achieved nationally and regionally, current levels of housing starts will see the supply of new homes coming to the market fall below expected demand…

why this matters to you:

in the short-term this has the potential to lead to upward pressure on housing prices and/or to further constrain patterns of household formation

why this matters to you:

2

the squeezed generation

3

road map

U D I 2 0 1 9

2 1 economics & politics

demographics, demand & supply

T H E L O W E R M A I N L A N D

the squeezed generation

Despite declining household formation rates, why was the market so busy over the past decade?

1976-1986 1986-1996 1996-2006 2006-2016 2016-2026

258,800 172,800 127,400 222,700 99,500 99,500

20 to 39 age cohort change over time

L O W E R M A I N L A N D

the post war boom had fully aged into this cohort by 1986…

1976-1986 1986-1996 1996-2006 2006-2016 2016-2026

258,800 172,800 127,400 222,700 99,500 172,800 127,400 222,700 99,500

20 to 39 age cohort change over time

L O W E R M A I N L A N D

the tail end of the millennial generation will age into this household formation stage of life over this period

46% 20% 39% 47% 53% 55% 57% 58% 56% 57% 59% 61% 62% 63% 51% 45% 16% 34% 45% 49% 52% 55% 56% 57% 57% 57% 57% 57% 58% 50%

total 20..24 25..29 30..34 35..39 40..44 45..49 50..54 55..59 60..64 65..69 70..74 75..79 80..84 85+

1996 2006 2016

the lifecycle of housing occupancy

L O W E R M A I N L A N D C E N S U S P R I M A R Y H O U S E H O L D M A I N T A I N E R R A T E S

• 21%
• 13%
• 6%
• 6%
• 4%
• 3%
• 3%

1% 0.5%

• 3%
• 6%
• 8%
• 9%
• 1%
• 2%

39% 47% 53% 55% 20% 57%

change 1996-2016

58% 58% 56% 56% 57% 57% 57% 59% 59% 59% 61% 61% 62% 62% 63% 63% 63% 51% 51% 56% 57% 57% 57% 57% 57% 58% 50%

• 3%

1% 1% 1% 1% 0.5% 0.5% 0.5% 0.5%

• 3%
• 6%
• 8%
• 9%
• 1%

if we continue to squeeze household formation for new home entrants, the region would need to add roughly 100,000 net new homes to accommodate demand from those entering the market

• ver the next decade…

why this matters to you:

to extend the same housing

• pportunities to the generation

entering the housing market that was enjoyed by the previous generation, we would have to add another 50,000 units to the region (a 50%

increase) over the same period.

why this matters to you:

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