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!

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.

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fgah
fgah
13 years ago

The best example is that last wk Van Sun reporting a house in a shitty are (731 Union )sold for 9200000plus.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.

Snap Up Real Estate
Snap Up Real Estate
13 years ago

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.

markx
markx
13 years ago

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.

scoop
scoop
13 years ago

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.”Buy that Aldergrove townhome today, or you'll have to settle for a condo in Hope a year from now.

Freako
Freako
13 years ago

"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?

Freako
Freako
13 years ago

"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.

betamax
betamax
13 years ago

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.

betamax
betamax
13 years ago

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.

rentah
rentah
13 years ago

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]

DaMann
DaMann
13 years ago

"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"… Read more »

scoop
scoop
13 years ago

The blurb Cecil linked to was turned into a longer article published in the Sun today, page D1 I think.http://tinyurl.com/23ocvsIncludes 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?

rentah
rentah
13 years ago

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?

rentah
rentah
13 years ago

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…

Freako
Freako
13 years ago

""Purchasers simply refuse to be priced out of the market,"So are they willing themselves into the market, or knocking off banks? The inability to afford something isn't an psychological construct.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.I presume that he intended it as a bullish comment, but this isn't Rocky II. Think Icarus.

blueskies
blueskies
13 years ago

…if everyone ups and heads to Alberta or points East, this will cause a housing crisis and subsequent market correction. coming back to take advantage of this market correction will cause a housing crisis by driving up demand and prices….

OnTheIsle
OnTheIsle
13 years ago

"Purchasers simply refuse to be priced out of the market, even though household income has not kept pace with housing appreciation," Elton Ash, Re/Max's western vice-president said in a news release."Now I've heard it all,sounds like a last second gasp to keep the sheep buying. We've been expecting the MSM to start targeting the most important group to keep the bubble alive at all costs. Man are these guys going to wear some of these comments in short order.

patriotz
patriotz
13 years ago

What concerns me most about the aftermath of a burst housing bubble is the possibility of a taxpayer funded bailout of all the "victims" who were taken advantage of by un-scrupulous lenders and greedy speculators.Didn't happen in BC and Alberta in the 1980's, didn't happen in Ontario in the 1990's, and it's not going to happen this time around either.There are way too many votes to be lost and too few to be gained taxing the majority to help a few FB's.The upcoming housing bust is likely to be accompanied by a recession, and John Q. Public is not going to appreciate cuts to schools and hospitals to aid his FB neighbour.CMHC may take a bit of a hit but they've been making good money over the last 10 years and that should cover any losses.Instead of bailouts you are… Read more »

Cecil
Cecil
13 years ago

Don't worry everyone, my friends at Remax told me there's no need to worry about the market collapsing because first time buyers will keep it afloat.http://tinyurl.com/ypg8smApparently an endless supply of lemmings are ready to jump into the game at this late stage of the cycle, burning any cash / rrsps / inheritances they have just to get a piece of the action."Purchasers simply refuse to be priced out of the market, even though household income has not kept pace with housing appreciation," Elton Ash, Re/Max's western vice-president said in a news release.*Choke* Did he say "news release"?

casual observer
casual observer
13 years ago

What concerns me most about the aftermath of a burst housing bubble is the possibility of a taxpayer funded bailout of all the "victims" who were taken advantage of by un-scrupulous lenders and greedy speculators.I'm particularly concerned about a bailout of CMHC, especially since they've been a huge enabler of this housing bubble.If you follow the stories about the U.S. bubble, that's the way people are talking down there. Nobody is responsible for their own lack of prudence anymore, it's someone else's fault.I would be very upset if the people who were patient, prudent and frugal were forced to pay for the excesses of people who were impatient, greedy, and impulsive.

patiently waiting
patiently waiting
13 years ago

streel,I can think of three things that have worsened in Vancouver in the last ten years:1) Housing bubble and all its side effects. Housing is so central to all our lives.2) The continuing increase in poverty. The DTES is quite overwhelming. Sidewalks lined with lost souls waiting to die. Even in the suburbs, the wandering homeless are everywhere.3) The weather, at least this last Winter.I can only imagine what this City will be like after the bubble bursts. I don't mind seeing the hardcore speculators get shafted, but a lot of lives will be ruined…including people in my personal circles.

Streel
Streel
13 years ago

…or beer goggles.

Streel
Streel
13 years ago

dingus said,"I never thought we would be thinking this way, but the city seems a lot less pleasant and welcoming than when we came here years ago. The character has changed these past few years for the worse," I have been reading alot of these types of comments lately. Maybe I am being dim and remembering Vancouver the way it was in the 90's. I moved from there in 99 and have only been back briefly since. Has the city really changed that much? Besides there being a disconnect with re prices, as we all know, is there other issues that have fundamentally changed as well? Or, would a good correction change things for all of you who are thinking about leaving? I am very curious about this and find it all rather perplexing. I would love to hear some… Read more »

patiently waiting
patiently waiting
13 years ago

Someone I know has had two offers fall through on a condo they are trying to sell. One due to denied financing and the other probably cold feet.One house near me was declared "sale pending" but not anymore. I'm also pretty sure I've seen a couple of the listings come back on the MLS after they thought they had "sold" recently.The NEWS development in downtown New West has a lot of condos still rotting on the MLS after several months with the prices reducing slowly. Some flippers are trying to rent them for Yaletown rates. With so many new buildings in New West, it will be sweet to see some burnt speculators.

dingus
dingus
13 years ago

"alot of people that care about affordability seem to be talking about moving away from Vancouver recently.. I think I'be seen posts from at least four different people in the last couple of days"We're on the knife's edge right now too. Serious discussions to the wee hours, looking at job postings and mls in different cities, pricing movers. Sad, 'cause the kids are in a good school, have good friends (as do we), and uprooting them would be hard. Both of us would also be leaving good white collar jobs that we enjoy, (for firms that are having real trouble hiring people). I never thought we would be thinking this way, but the city seems a lot less pleasant and welcoming than when we came here years ago. The character has changed these past few years for the worse, and… Read more »

Freako
Freako
13 years ago

"I've only watched that show a few times, and all ended with a similar result. One woman turned down $100k to walk away with $500."That brings up a point I have made in the past: In the aggregate, people are regret averse, not loss averse.The interesting thing is that regret depends on perception of break even. Break even can be a subjective thing. For example, most are unable to view break even in real terms.The classic example is Tversky and Huhneman's prospect theory, where people will answer identical questions differently depending on how the question was framed.If regret aversion holds, those who sit on gains will sell when prices start dropping, but those who go under water will refuse to sell – unless they are forced to. That would create a ripple effect as falling prices cause speculators to sell… Read more »