Vancouver just got more affordable!
According to this article in friday’s Province, housing affordability just improved across canada, even right here in the GVRD! Won’t this be good news for first time buyers!
RSS 2.0 comments feed. Both comments and pings are currently closed.In Greater Vancouver, the percentage of household income needed to service mortgage payments, utilities and property taxes actually improved in the fourth quarter of 2006. For a detached two-storey home, the measure dipped slightly from 74.9 per cent of median family income of about $58,000 in the third quarter to 73.5 in the fourth.
Vancouver’s affordability metrics are in a sharp contrast to other Canadian cities. That same two-storey home requires 48.8 per cent in Toronto, 43.1 per cent in Calgary and 35.2 per cent in Ottawa.
The down-tick in Vancouver is hardly going to trigger a stampede of buyers to the detached-home market, said RBC assistant chief economists Derek Holt.
“In terms of one quarter’s worth of evidence, this isn’t going to make any material difference [in sales],” said Holt. “You almost have to get out the microscope to see the affordability improvements. But our view is this is the start of a trend that will unfold throughout the course of the year and will start to attract first-time buyers.”
The condo and townhouse markets are still looking attractive to Vancouver first-time buyers. A townhouse required 51.6 per cent of household income, while a condo demanded 35.4 per cent.
April 22nd, 2007 at 12:46 pm
The best example is that last wk Van Sun
reporting a house in a shitty are (731 Union )sold for 9200000
plus.What is going on men! Having that kind of money I can retire and buy a decent house in Halifax with a big chunk left,at least 700000.Vancourites are all crazy.
March 23rd, 2007 at 11:10 am
Vancouver will never be affordable for regular people. It has become like New York City, tiny homes for too much money. I guess the traffic is not going to get any better either.
March 21st, 2007 at 2:46 pm
Vancouver has historically been unaffordable, even in the economically dead 90’s. The income/rent ratio was already out of whack before this mess started. I guess there are certain “good weather tax” associated with GVRD.
When prices fall back to fundamentals, it fall back in line with rent. If you think rent in GVRD is unreasonable, then there’s not much you can do about it. Personally, I’m leaving BC for a few years to let this housing mania settle down.
March 21st, 2007 at 12:34 pm
Yes, the Sun article is fairly balanced – he included plenty of warning bells for those inclined to pay attention.
The Re/max release is a different story – although what do you expect from a real estate firm.
“Low interest rates and solid economic performance in most major Canadian centres have also played a substantial role in providing purchasers with the confidence to go out and buy their first home,†explains Polzler. “Yet, in some centres, there are other motivating factors at play. Price increases, for example, are a reality in the marketplace. One year can set you back – from location to house size – and your dollar just doesn’t have the same purchasing power.â€
Buy that Aldergrove townhome today, or you’ll have to settle for a condo in Hope a year from now.
March 21st, 2007 at 12:05 pm
“Includes a quote by Aaron Best on how hot the market is.”
Interesting in that Best is Chipman’s trusty sidekick and that Penner posted to VHB on occasion. Some of his coverage has been fairly objective, he is just doing his job. I have also seen some of his stories that I felt were slanted either way. He did take exception when VHB commenters ripped the notion of young buyers getting in over their heads.
Let’s see how far the spring inventory runup will go. Affordability wall, where art thou?
March 21st, 2007 at 12:00 pm
“Who spins this garbage? I have read a few times now “condos are the favourite choice of todays buyers” “
I think it originated with the RBC affordability report of a few years ago (it has changed author/analyst since). Ostensibly an objective look at affordability, the editorial portion left a little to be desired. In the Vancouver section, it called condos a something like “tremendous option”, as if it was a little known secret.
There are reasons for relative pricing between SFH and condos. If we follow the logic that something is underpriced people can afford it, we will soon live in phone booths that eat up 30% of our income.
March 21st, 2007 at 10:39 am
Some wealth is starting to be transferred from baby boomers to their children as the leading-edge of that group reaches retirement age between 2008 and 2013.
Ah yes, boomers are going to usher in a Star Trek future with unlimited money for all, and we’ll all drive rocketships to work in the robot factories on Mars.
The reality is that boomers are going to be facing 30 years of post-work living with underfunded pension funds and medicare in shambles, and they’re going to be hanging tightly to their dollars with both bony, veiny hands.
March 21st, 2007 at 10:30 am
What he is really saying is that buyers are stretching affordability to the limits. That obviously means that upside is limited and that foreclosure risk is high.
That’s the only logical conclusion, but it doesn’t encourage further lemmings to leap into the void, so he left it out.
March 21st, 2007 at 8:46 am
extract:
Some wealth is starting to be transferred from baby boomers to their children as the leading-edge of that group reaches retirement age between 2008 and 2013.
“That’s the reason why we’re pretty confident with how the market is going to continue to perform in the near term,” Ash said.[Elton Ash, RE/Max]
March 21st, 2007 at 8:31 am
“The Re/Max report is a survey of its realtors in 13 cities across the country, which found condominiums to be a more popular choice for housing in markets where prices have gone up most, such as Edmonton, Calgary, Saskatoon and Kelowna”
Who spins this garbage? I have read a few times now “condos are the favourite choice of todays buyers” Umm hello, it’s the ONLY choice! Surely these people don’t think that all of a sudden people prefer to live in condos rather than SFH.
Bloody idiots. My Mom was an agent for 13 years and I once saw a cartoon hanging on the wall of one of the other agents office. It depicted an agent on his knees praying, the captions said” Oh please god let there be another boom, this time I promise not to piss it all away”
I have never ever heard an agent, my Mom included, who ever predicted a boom or more importantly a bust. Why people take their words as gospel about the market is beyond me. It’s always a good time to buy and always a good time to sell, according to them.
March 21st, 2007 at 8:01 am
The blurb Cecil linked to was turned into a longer article published in the Sun today, page D1 I think.
http://tinyurl.com/23ocvs
Includes a quote by Aaron Best on how hot the market is.
The message seems to be that things are getting stretched, but you can still afford a wee little condo if you overextend yourself on a 35 year mortgage.
When will the madness end?
March 21st, 2007 at 7:22 am
By the way, a question re building costs:
I believe that building costs for a new SFH in Vancouver currently run anywhere between $180-$250 per squ ft.
Is this the right range?
How do building costs compare across Canada?
For instance, what does it cost to build in Ottawa?
March 21st, 2007 at 7:17 am
Can you imagine all the current bullish RE talk in Halifax? – “Influx of money from the westcoast”, “these guys are used to paying $1000/sqft”, “suitcases of cash from gro-ops”, yada-yada…