PRICED OUT OF TOWN
Affordability rate drops again
Owning a home in Vancouver gets further and further out of reach with each passing month. Just three per cent of Vancouverites can now afford to buy a house in the city, the UDI/Vancity Housing Affordability Index for the first quarter of 2016 shows. That’s down from five per cent just four months ago, the index shows.
Affordability rates get a little better for townhouses and condominiums, but still just one-third of income earners could buy the average resale wood-frame condominium in the city, the index shows.
Mortgage rates stayed fairly stable, with the eight big banks posting average five-year fixed rates at 3.14 per cent, up from 3.06 the previous quarter, the index shows. There are still three banks, BMO, TD and HSBC, offering five-year fixed rate mortgages between 2.59 and 2.7 per cent, the index found.
But even those historically low interest rates leave most people unable to afford a home. Prices just keep going up, sending home ownership further and further out of reach, unless one is willing to buy a condominium in an outer suburb.
The median price in Vancouver for a detached home is now $2.25 million, while in the closer suburbs it’s now $1.45 million. In Vancouver, that number jumped by $250,000 in the past quarter, while in the suburbs it jumped $50,000, the index shows. In Inner Metro, 13.1 per cent of people can afford a single-family home, the index shows.
Even in Outer Metro, made up of the Fraser Valley and Ridge Meadows, just one-third of income earners can afford the median price of $848,000 for a single-family home. That price is up about 10 per cent from last quarter.
The index breaks down the percentage of households living in a region that earn the income required to qualify for the mort- gage needed to own the property. Typically, a bank wants no more than 32 per cent of income going to housing.
Prices increased across most locations and types of housing, said Jon Bennest, co-owner of Urban Analytics. This was most pronounced in Vancouver proper, where projects with higher prices were offered for sale in downtown Vancouver and along the Cambie corridor, Bennest said. There was also an overall lack of properties for sale in East Vancouver.
The number of people able to afford-wood-frame-condominiums in East Vancouver fell markedly, from 36.7 per cent to 30.6 per cent, the index shows. This is the result of very few homes for sale on the city’s east side, and a few higher priced projects in Marpole and along the Cambie corridor that came up for sale, Bennest said.
There was a slight improvement in the number of people able to afford townhouses in the suburbs nearest to Vancouver, but it wasn’t because prices went down, Bennest said. Rather, it was because there is a shortage of townhouses for sale in the higher-priced suburbs of Richmond, the North Shore and the Tri-Cities, Bennest said.
At the same time, fewer people are now able to afford townhouses in the outer suburbs because prices went up, Bennest said. He said a “severe shortage” of new townhouses throughout Metro will mean fewer and fewer people are even able to afford a townhouse.
Metro’s furthest suburbs are still affordable for more than half of income earners, as long as they’re willing to live in a townhouse or a condominium. About 70 per cent of income earners can afford a townhouse in Outer Metro, while about 75 per cent can afford a wood-frame or concrete condominium.