News

In Vancouver 90% of household income goes towards housing costs

By Vancity Buzz Staff | 2 years ago | Speak Up

This shouldn’t come as a surprise to anyone that Vancouver still remains the least affordable housing market in the country and is so by a wide margin. The conclusion,  owning a two storey detached home in the city is a pipe dream for most. That is why you’ll continue to see a surge in the downtown population where condo prices are much more manageable for the average Vancouverite.

Those that can’t fathom the idea of living in condo are leaving Vancouver altogether. Not a good sign and something the city must seriously look into because as much as they think they can build their way out of this problem, you can’t. The pace of construction and the housing coming on to the market for the most part is catered to the high-middle class. the lower-middle class housing options are rare.

 

Vancouver – Market slows amid intense affordability pressure

RBC Housing Affordability Measures Extremely poor affordability appears to have caught up with the Vancouver-area market. Since spiking unexpectedly at the start of 2011, home resales in the area have fallen steadily. So far this year, resales plummeted 18% from a year ago. Such weakness significantly loosened market conditions to the point that sky-high prices have started to wind down recently. The MLS Home Price Index for Vancouver topped out in May and has since declined (month to month) in both June and July. (Average prices of homes sold in Metro Vancouver, which swung widely in the past 18 months due to unusual sales patterns, fell every month since March and were down 12% year over year in July.) On a quarterly basis, however, home prices used in the RBC measures still moved higher sequentially in the second quarter, which contributed to further widespread deterioration in affordability in the area. The RBC measures increased between 0.4 percentage points and 2.2 percentage points, inching yet closer to the worst levels in the annals of Canadian real estate. We expect such intense affordability-related pressure to continue to weigh heavily on the Vancouver market.

Vancouver vs Calgary vs Toronto vs Montreal

Looking at the graph below you can see that Vancouver’s percentage of household income (average) is approaching 100%. No wonder we don’t have any residual income and why are bars aren’t packed 5 nights a week. We simply don’t have the money to go out.

 Canadian Housing Ownership statistics

 

 

Source: RBC

Image  by rommy ghaly

Speak Up

  • Vancouverite

    The lack of outrage shows how Vancouverites have become complacent or are just drinking the real estate kool-aid.

  • Csrrgd

    Not to be picky but it is hard for your graphs to have any impact when the y-axis on each one is different. Vancouver really doesn’t look that different because the other graphs go from 0-60 or 80 

  • NathanB

     We just need to get over the idea that you need to have a detached house with a yard in order to raise a family. In most large cities (ie New York, Paris, London) condo living is the norm and has been for a long time.

  • AJ Smyth

    I love what developers get away with in this city. 550 sq ft 2 bedrooms, 350 sq ft 1 bedrooms for $450k +. I have seen layouts in this city that a f”n laughable with washrooms adjacent to the frigan kitchen, and developers can get away with it because people actually buy them. I just finished my MBA in chicago and bought my first rental property for 335K and I got 1400 sq feet on the 30th floor with views of the lake,river and city I am still living in a world class city. I will admit vancouver is one of the most beautiful cities in north america WHEN it ever actually gets sunny. But i got sick of asian and middle eastern investors buying vacation homes that sit empty driving up the rent. My brothers building in yaletown currently has a 38% residency YEAH 38%. At least cities like New york & Chicago limit the amount of places that are vacation homes in central downtown districts. Vancouver prices per sq ft are on par with New York and on many occasions even more, sorry but vancouver is a great city but it sure as he|| is not anything close to NY.

  • van

    I agree with  most of what you say, but the US is in something like year 8 of a very painful housing correction, that has seen something like an average of 60 percent of equity vanish.

    Vancouver has only just started to correct….also out of the city proper the prices drop dramatically. I don’t think a one bed of 350 sq feet would go for 450, more like 275.

    Rent is still reasonable in vancouver which is all that’s not turning it into a complete resort town.

  • http://twitter.com/OlympicOrange johnvanrij

    I don’t understand how this works. How can someone finance everything else from 10%? If you make $100K and pay 33% to CRA, how do you pay for primary things with $6,6K? I can hardly cover my hydro, Shaw and cell phone bill with that.

    And how does anyone get a mortgage that is 90% of your income?

    This data must be false or interpreted incorrectly, don’t you think?

  • Noyb

    This is the problem with using averages.  They are all but meaningless.

  • http://www.facebook.com/JoeManhas Joe Manhas

    90% of (legal) household income goes to housing.. lots of other type of money in Vancouver.  http://bchomez.com

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