As anyone who has recently looked into buying a home in the Vancouver area knows, prices are skyrocketing and the dream — or perhaps, the pipedream — of buying a house is out of reach for almost all middle-income earners.
In 2016’s first quarter, it cost 119.5 per cent of the median hoausehold income to cover ownership costs associated with a single-detached home, according to RBC’s Housing Trends and Affordability report released June 22. This is up from 109 per cent at the end of 2015. For all home types, including houses, condos and townhomes, it cost 87.6 per cent of median income.
While strong job growth and other favourable economic conditions are responsible for some of the price increases, there is clearly something else at play, RBC economics said in its report.
“Such a pace of appreciation is often symptomatic of expectations of further gains, rather than fundamentals, driving property values to ever dizzying heights,” the report said.
“In addition, housing affordability is being crushed in the process.”
By comparison, the national average affordability was 47.1 per cent of median income, and this figure was propped up by the heated markets in Vancouver and Toronto, where ownership cost 60.6 per cent of median income for all home types and 71.7 per cent for single-detached homes.
For all home types in Vancouver, aggregate prices grew 8 per cent in Q1, which is the biggest quarterly increase in more than a quarter of a century. Year-over-year, prices were up 24 per cent overall and 25 per cent for houses.
RBC said prices have continued to accelerate since the first quarter, and this points to further problems going forward, with affordability likely deteriorating even further in the upcoming months.
@EmmaHampelBIV
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