Thank goodness we don’t have a housing bubble in Vancouver!
Otherwise one might start to worry about these latest numbers on housing affordability.
The housing affordability index takes local family income and then looks at what percent of it would would be required to service the debt on an average benchmark bungalow.
The entire province of BC is at 69.7% and blows away the rest of Canada for overpriced houses. Only Ontario starts to come close with an affordability index of 43.9%. Even Toronto can’t compete in the overvalued housing arena, coming in at 54.5%.
According to RBC Vancouver is the champion of overpriced houses. To buy the benchmark bungalow here it would take 91% of a local families pre-tax income to service the debt.
From Macleans magazine:
Nothing, of course, could persuade condo king Bob Rennie that the Vancouver housing market is in a bubble (or, worse yet, a bubble that’s starting to let the air out).
For everyone else, take a look at this chart RBC put out today with its latest survey of housing affordability in Canada (which is deteriorating in most provinces, by the way)
No problem, just arbitrarily knock 20% off those Vancouver numbers and we’re not much worse than Toronto.
If you look around the world, you may be able to find a few markets that have an even worse affordability index than Vancouver, with lower incomes or higher house prices. But for some reason, most of those places seem to be able to pull in higher rents than Vancouver.