rfmcdonald | [URBAN NOTE] "External factors setting Vancouver's housing costs, university study finds" (Reply)

The Globe and Mail's Rosemary Newton reported last month about the extent to which Vancouver's housing costs are driven by external factors.

An analysis of vast amounts of City of Vancouver data by two Simon Fraser University researchers has found that the factors that typically prompt increases in housing prices in most cities only explain a tiny part of the picture in Vancouver.

Saeed Soltani and Bita Shadgar, students in SFU’s big-data masters program, examined more than one million records from the city’s open data catalogue. Records analyzed dated from 2006 onward and consisted of property tax reports, North American crude oil prices, exchange rates between U.S. and Canadian dollars and mortgage rates.

“Our main goal was to find out the correlation between main factors that impact housing prices in all parts of the world with housing prices in Vancouver,” Mr. Soltani said. “The interesting thing is how little impact the main factors have on housing prices in Vancouver.”

The typical factors thought to play a strong hand in changing housing costs, according to Mr. Soltani, include demographics, economy, interest rate and government policies. Of the data the researchers pulled, these main factors only appeared to play only a 25-per-cent role in increased housing costs, he said.

“There’s a 75-per-cent external factor that’s setting the housing price in Vancouver,” he said.