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