The 54 page report that the Vancouver Sun authors are referring to is the "8th Annual Demographia International Housing Affordability Survey 2012" by Wendell Cox and (Demographia) and Hugh Pavletich (Performanace Urban Planning). This group has been looking at affordability issues in English speaking countries for some time and have built up a fine reputation.
What is alarming in the report is that they have identified 6 severely unaffordable cities in Canada and the top 4 are in British Columbia. Severely unaffordable being defined as cities where a family median income multiplier of 5.1, or more, is required to acquire median priced housing. Now, I believe this "median priced housing" includes everything from apartments, townhouses, houses to homes on acreage.
Vancouver's median priced property in the third quarter the report states was $678,500.
When I looked, at single family detached house sales in Vancouver during the year 2011, I found an average sale price of $1,640,000. I add this note to clarify and show that if you are thinking about buying a house, on its own lot, in Vancouver the problem is really a lot worse than illustrated.
Vancouver wasn't the only bad news. The top 6 "severely unaffordable" cities in Canada are:
City Median Multiplier 5.1 and over
- Vancouver 10.6
- Abbotsford 7.0
- Victoria 6.6
- Kelowna 6.6
- Toronto 5.6
- Montreal 5.1
What is the culprit? According to Cox and Pavletich "the record shows that smart growth (urban consolidation and compact city policies) is incompatible with housing affordability." Locally, that would mean zoning practises, ALR reserves and other forms of artificial boundaries imposed on development by government.
It is important to note that the report does not factor in the availability and cost of money. Perhaps Canada has benefited more than other nations with our stable banking system and competitive rates? As of this date a 5 year term, 25 year amortization mortgage could be obtained at the discounted rate of 3.09%. There may be other elements at play as well, such as, size, quality and age of the housing stock.
What about Chilliwack, BC? How does it compare? In 2011, the average sale price of residential property, (houses, apartments, townhouses etc.), sold for $301,000. Quite a ways from the lofty prices of Vancouver and even those in Abbotsford, but, I suspect, Chilliwack, Agassiz & Harrison Hot Springs would still be rated as "moderately unaffordable" even if they remains the most affordable housing options in the Fraser Valley.
Imagine living here....
Stephen Mullock RI
is an award winning full-time real estate agent with 30 years of experience and hundreds of sales. Thinking of buying or selling real estate in the Fraser Cheam communities of Chilliwack, Agassiz or Harrison Hot Springs? Contact Steve (click here) Royal LePage Wheeler Cheam Realty for experience, local knowledge and friendly service you’ll be happy you did.