It’s no secret to lower mainlander’s that housing prices are sky high. The recent Demographia survey indicates that Vancouver is now the 2nd costliest housing market in the world, just behind Hong Kong and ahead of Sydney. The city has become so unaffordable for most that many are forced to the far flung suburbs to toil away in rush hour traffic day in and day out. The amount of million dollar detached homes is ridiculous, just check out this map of million dollar homes in Vancouver.
Here is a blurb from Bloomberg Businesweek:
Vancouver displaced Sydney as the least-affordable housing market after Hong Kong among large English-speaking cities, as home prices rose faster than incomes, a study of 325 metropolitan areas worldwide showed.
Vancouver’s median home price of C$678,000 ($686,400) in the third quarter was 10.6 times its median pretax household income of C$63,800, making the city “severely unaffordable,” Demographia said in a report today. A ratio of 3 or less is considered “affordable,” according to the public-policy firm’s survey of markets in Australia, New Zealand, Ireland, the U.K., the U.S., Canada and Hong Kong.
Sydney’s ratio of median home price to income was 9.2, while Hong Kong’s was 12.6, a record for the eight-year-old survey, surpassing the previous high of 11.5 for Los Angeles in 2007. Home prices in Hong Kong, Vancouver and Sydney haven’t plunged as they have elsewhere, such as in Ireland, now the second most-affordable country, after the U.S., the study said.
“Housing affordability generally improved in the surveyed nations, though the most unaffordable markets, Hong Kong and Vancouver, became even more unaffordable,” wrote Wendell Cox, principal of Belleville, Illinois-based Demographia, and Hugh Pavletich, managing director of Pavletich Properties Ltd., a commercial developer and investment company in Christchurch, New Zealand.
Policies limiting lots available for construction drove up land prices, putting homes out of reach for middle-class buyers and younger workers in cities such as Vancouver and Sydney, the researchers said. The median price of a detached house in metropolitan Vancouver reached a record C$900,000 in April 2011, according to the Real Estate Board of Greater Vancouver.
For those waiting for the bubble to burst, it looks like you’ll have to keep on waiting. I’m not saying prices will continue to go up forever, however, a bubble bursting scenario isn’t likely. Furthermore, if such a thing were to happen, there are so many buyers waiting to jump in that prices will just go up again. At this point I’m not even convinced that density is the answer. After all, Manhattan is the most dense part of North America, and housing is insanely expensive over there.