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Vancouver not as unaffordable as it seems: the data

May 31st, 2011 · 12 Comments

The Urban Futures people have helpfully posted links to the research they’ve been doing on recent house sales, looking at whether prices for houses paid at the high end are skewing perceptions of the rest of the market.

When Bob Rennie made his recent speech at the UDI, he was relying on this info.

Here it is, deconstruct away: http://www.urbanfutures.com/average_prices.html

Categories: Uncategorized

  • Sean

    I’d be a lot more convinced by this analysis if it included similar data from a variety of other cities to show that Vancouver is somehow anomalous in it’s distribution of house prices. But I strongly suspect that most cities show a similar price curve.

    It may be reasonable to advise prospective Vancouver buyers that prices aren’t as daunting as the averages may suggest, but in no way do I think that this should be taken as an argument that Vancouver prices aren’t high in comparison to other cities.

  • lb

    Important to note that Metro Vancouver does not equal Vancouver. (I’m sure we’ll all agree that Maple Ridge and Vancouver are rather different.)

    This data is for METRO Vancouver.

  • Roger Kemble

    We are way off the point here. What matter is, can a hard working family afford to live in their own city?

    Housing affordability in Vancouver BC

    Standard Two-Storey: $716,000 qualifying family income $141,600.
    Detached Bungalow: $635,800 qualifying family income $126,000.

    Townhouse: $476,300 qualifying family income $94,500.

    Condo: $362,700 qualifying family income $72,400.

    Based on a 25% down payment and a 25-year mortgage loan at a five-year fixed rate -excluding maintenance fees.
Source: RBC. March 2010.

    Family Type:
    Non-immigrant: Median Family Income $80,127

    Immigrant: Median Family Income $60,316

    Source: Statistics Canada, 2008.

    Play the numbers game all you like these numbers say an average hard working family cannot afford to live in Vancouver: their own city. That is the point!

    Why is another question for which we are unlikely to get a straight answer.

    Why are are we spending so much time and effort fudging?

  • Kirk

    The population of Victoria is really quite young compared to other cities, if you remove the oldest 20%.

    The 2006 census recorded that 19% of Vancouver was ethnically Chinese. But, ignoring them, there are hardly any Asians living here.

  • Glissando Remmy

    The Thought of The Afternoon

    ‘Continue bringing this subject up over and over and call it ‘The Truth’ until it becomes socially acceptable as the Truth. Not.’

    Deja vu, Frances? Didn’t we just complete this exercise in futility two posts back?
    Good for Roger Kemble #3 to catch up on this earlier, and call out the ‘Rennie’ bluff.

    Vancouver is an outdoor gambling casino. Period.
    Those that call themselves ‘Investors’ are in fact real estate addicts.
    Affordability. Could anyone please define that for me? That’s just a word. It means nothing. Affordability means different things for different people. Depends who you ask.

    I know one ‘News of the World’ editor in London for whom a parking ticket worth 10 UK Pounds is an outrage but a 150 UK Pounds bottle of 2001 vintage Dom Perignon is a bargain.
    Go figure.

    We live in Vancouver and this keeps us busy.

  • Woolysock

    Roger Kemble is on point here.
    1) An average-earning hard-working family can’t afford the mortgage payments required to live in Vancouver.
    2) And that’s not to mention the difficulty saving the 25% downpayment required in his calculations. Whew! Try saving that kind of money in our after-tax dollars.
    3) Speaking of after-tax dollars, there’s the real rub: folks are coming here by the plane load from other jurisdictions, Mainland China for example, where cronyism and tax structures make it possible to amass sufficient wealth to pay cash on the barrel head for a westside home, while making it impossible for local folks to compete.

  • voony

    No, the data is not for metro Vancouver, but for Lower Mainland, it include Chilliwack…but not Vancouver West…it is statistic manipulation from little value if any…

  • Westender1

    Thank you Kirk for one of the best blog laughs I’ve had in a while:

    “The population of Victoria is really quite young compared to other cities, if you remove the oldest 20%.

    The 2006 census recorded that 19% of Vancouver was ethnically Chinese. But, ignoring them, there are hardly any Asians living here.”

  • Gassy Jack’s Ghost

    According to Roger’s StatsCan numbers, about 80% of Vancouverites are barely able to afford a home, or cannot.

    When prime rates inch up 2-3-4 more percent (still historically low) first-time buyers and young families will be totally excluded from Terminal City, and Rennie’s second favourite target market, the “creative class” (rebranded yuppies), will also vanish the scene.

    So, uh, what happens then?

    As Jesse said a couple posts back:

    “If the city is so desirable with as bright a future as its proponents claim to justify higher prices, we should be seeing rents going up to reflect this.”

    As a leading indicator, the softening rental market puts the boots to Rennie’s insufferable pitch.

  • Ternes

    So the conclusion drawn from this research about affordability in absolute terms is pretty misleading since the trend they describe is actually a change in relative price movement: all prices are high and all are going up; however some prices are going up *much faster* than other prices. The relevant bits being that for houses “the top quintile increased by 21 percent while the other 80 percent of sales increased by ten percent” and for condos “prices in the uppermost quintile rose by more than six times the rate of those in the bottom 80 percent of the market (a 26 percent increase versus four percent).” So this means that the top 20% accounted for a larger proportion of the overal average price than in previous years–thus skewing the average price relative to previous years.

    What does this mean for current affordability as well as actions that could be taken to make housing more affordable? That’s a whole other issue that I really don’t have time to think through right now…but it would seem to suggest that any strategies that you might use would have to be targetted towards the different portions of the market, rather than an accross-the-board uniform change.

  • Ternes

    ps. I can’t spell 🙁

  • Allison Barber

    I recently attempted to make a deal with a group of Chinese investors. I will never waste my time like that again. IMHO we may as well just make Canada a province of China…they will own us and the US eventually. The government must put some sort of constraints on land ownership by foreigns.