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jimtan
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What can you afford in Vancouver?

Thu Feb 14, 2013 9:58 pm

The real question for rational people is what RE markets are affordable in Vancouver. The numbers here sink the bear myths.


What can you afford? New housing affordability index shows it varies across Metro Vancouver

Headlines regularly tell people that Vancouver is among the least affordable cities in the world. But often they don’t tell the full story — that while the city of Vancouver is a pricey place to be a homeowner, the suburbs still have home prices that are affordable to most families...

The UDI/FortisBC Housing Affordability Index breaks Metro Vancouver into three areas — the city of Vancouver, Inner Metro (West Vancouver, North Vancouver, Burnaby, New Westminster, Richmond, Delta, Coquitlam, Port Moody, Port Coquitlam) and Outer Metro (Surrey, Langley, North Delta, White Rock, Pitt Meadows and Maple Ridge). Urban Analytics calculated the numbers using average prices for new homes and median prices for resale homes...

The index shows that the majority of households in outer Metro can afford the payments on all types of homes, both new and resale. It found that as many as 82.9 per cent of households in outer Metro could make the payments on a re-sale wood-frame condo, while 80.4 per cent could afford a re-sale concrete condo.

For inner Metro, the index found that while 64.5 per cent of working households can afford a re-sale wood-frame condo, just 51.7 per cent of working households can afford a new concrete condo. For single-family homes in inner Metro, less than 40.9 per cent of households could afford to make the mortgage payments.

In Vancouver proper, housing is affordable for a far smaller percentage of the population — the UDI/FortisBC Housing Affordability Index shows that fewer than 32 per cent of households can afford payments on a single-family home, a new or re-sale townhouse or a new concrete condominium. The numbers are a bit more encouraging for other types of housing: 34.7 per cent of households make the $66,017 required to make the payments on a new wood-frame condominium, 35.4 per cent of households make the $65,129 needed for a resale concrete condo, and 49 per cent make the $48,455 required for a $356,000 resale wood-frame condo.

The index defines “affordable” as the percentage of households living in a region who would qualify for the mortgage required to own the property. Typically, a bank wants to see no more than 32 per cent of income going to housing before it provides a person with a mortgage...

The UDI/FortisBC Housing Affordability Index treats first-time buyers differently, as most have less money for a downpayment and thus need an insured mortgage. For such buyers, the index assumed a 10-per-cent down payment (the lowest allowed to get an insured mortgage) and a 25-year mortgage amortization (the maximum allowed for an insured mortgage).

Using those assumptions, the index shows that 63.3 per cent of working households in outer Metro earn the $46,384 annual salary required to buy the average new wood-frame, 836-square-foot condominium, while 48.8 per cent are above the required income of $59,760 to buy a similar condo in inner Metro, and less than 32 per cent earn the required $82,649 to afford a similar type of condominium in Vancouver proper. For resales, the percentages were higher; 76.9 in outer Metro, 54 in inner Metro and 37.9 in Vancouver proper.



Read more: http://www.vancouversun.com/business/Wh ... z2KwmK0hpy

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