Report: Vancouver is THIRD in the world for unaffordability
Jan 25, 2011
January 25, 2011
Canada’s real estate market has really taken off– and some say that it’s taken off beyond a sustainable rate of appreciation.
And a report released by the Frontier Centre of Public Policy corroborates that claim. According to the Vancouver Sun:
The average home in Vancouver, according to data from the third quarter of last year, cost $602,000– or 9.5 times the $63,100 median income of households in the city, according to the survey results released Monday.
Wow. And it ranks Vancouver as the third least affordable city in the world (beat out only by Sydney, Australia and Hong Kong).
But it wasn’t just Vancouver– Victoria, Abbotsford and Kelowna were also startlingly close to Vancouver’s ranking. The study touted all four cities to be “severely unaffordable”. Toronto and Montreal also made the list– but nowhere else in Canada. How do the eggheads define housing affordability? Well, basically if the multiplier is higher than 5, then it’s severely unaffordable.
So if these are the cities you shouldn’t be moving to– where should you be going?
If a massive folk festival and extreme weather tickles your fancy, consider the city of Winnipeg. The multiplier there is just 3.2 (and the average income is just slightly lower than in Vancouver).
If you’re into the Oilers and love to shop, consider Edmonton where the multiplier sits comfortably at 3.5 (an interesting side note…apparently the average income in Edmonton is $88,800, what do people DO out there?)
So the big question– why?? Why is Vancouver so unaffordable while other cities seem to be affordable and totally fine.
“These land prices include the cost increasing influence of land supply restrictions (such as urban growth boundaries), excessive infrastructure fees and other overly strict land use regulations”
In short, the government is forcing land costs to rise sky high. It’s like a standoff. Imagine developers are holding affordability hostage, and the government says “Do it, I dare you” and then they did it.
That sounds about right to me. So, my sincerest apologies to the residents of Vancouver. That really blows.