Are housing affordability stats really misleading?
On the heels of more headlines over housing affordability Vancouver mayor Gregor Robertson announced a task force last week to see if government policy changes are needed to increase the stock of affordable housing. But are things as bad as the headlines would indicate?
Looking at median or average prices of detached bungalows compared to the median or average income is largely meaningless, she argues, particularly for younger families. That's because such studies are too heavily weighted to a type of property that's not really on their radar.
When individuals, couples or families buy their first home in larger Canadian cities, increasingly it's more likely to be a townhouse or a condo.
"If we are truly interested in understanding the ability of individuals with average incomes to buy a home in the higher priced, metro areas, then at minimum look at strata-titled attached homes (rowhouses and condos) instead of detached homes," she writes.
"Ideally you also remove the product coveted by the multi-millionaire club from the analysis. Suddenly the income needed to get into the market looks more familiar to most of us — $50,000 for Metro Vancouver, $38,000 in Greater Toronto."
Seems low to me, but not according to this study. If little else, it suggests that first-time homebuyers may not have as much of a hurdle to jump as many have thought.
What's your experience? Are housing affordability stats really that far out of whack?
By Gordon Powers, MSN Money
Posted by: rogers dad | Feb 23, 2022 8:28:48 AM
"When individuals, couples or families buy their first home in larger Canadian cities, increasingly it's more likely to be a townhouse or a condo."
This woman is out to lunch, every couple that I know who bought in the last 2 years as first timers all bought single detach, double car garages in the $450k+ range, they all make average incomes.
Posted by: Dave | Feb 23, 2022 8:32:39 PM
I am so glad that work is always in the same location your whole life, property taxes will always stay low, employement is guaranteed for life and that there will be lots of mortgage money available when the bulk of the babyboomers to retire guaranteeing low interest rates Forever !
It is also luck that women either don't ever want to have children when they are young or are happy to raise a family in a cramped condo while working full time. It was nice to see that the "generational divide" segment nicely overlooked the change in young peoples student debt levels.
All in all a wonderful publication clearly outlining how any long term risks can be easily overcome by a large mortgage on a crappy property with surprise condo fee spikes. Where do I sign up?
Posted by: Mr,Trujillo | Feb 24, 2022 2:31:15 AM
Rogers dad is correct and the lady is maybe thinking of Toronto and Vancouver in the country of Bolivia? becuae for $50,000 a year you will be able to get an east van studio for $230,000 with say %10 down. The reality in vancouver is that the money that has jacked up the prices of a little 50's 3 bedroom bungalow is around $750,000 and up in east van, a traditionally working class and immigrant neighbourhood and starting at $1,3 million in the west side for the same 50's bungalow. there arent enough real $200,000 to $5 million annual salaries in vancouver to explain those prices. The money comes from outside. i dont blame the Chinese or the Hing Kong buyers before them, its not their fault that our governments have allowed the ones with the highest bid to win local families their chance that their parents had. Neither China nor many other countries allow foreigners to buy property in their countries without being citizens yet we say,, you hvae 5 millions! Go ahead dorrs right open!
Posted by: Joe | Feb 24, 2022 4:37:47 AM
Just heard an interesting stat regarding a hi-rise condo development in Toronto that recently opened a 1/3 of the units for the buyers to move in....all owned by someone....BUT NO ONE moved in...why? because they were all owned by someone from China!!!
another amazing stat. Toronto has 2 times or MORE the number of condos under development than any other city in the world....why? because foreign investors are buying them up....
to comment on the article, the thing with statistics is they can be interpreted in many ways...and yes, you probably can buy into the housing market with 50,000 annual salary...but what does it really get you? and under a basic definition of housing, i'm sure whatever 50k gets you meets that definition...but do many people really want that or are they forced into it out of basic needs...That's why most young families end up buying them...
Posted by: kyle | Feb 24, 2022 9:56:46 AM
All the comments above are correct. I am second time home buyer and am 27. Both houses starter homes. It is said that a couple with one child really can't afford much more than 250,000. (when i say afford, i mean having more than $20 left at the month) In our price range we are offered condo's or town homes, it isn't our option that is what we are given. The only other option is to rent, and there is a real negative attitude to renting out there. (not sure why)
If the average family can truly no longer afford a home, and simply pay interest and taxes through the nose, it will be hard for us to spend money else where and keep other businesses growing. The only businesses that will make the money are energy, banks and the middle man in between.
I pray for us.