MORTGAGE Blog & ARTICLES
Vancouver Real Estate less affordable than US
Low incomes and high prices in the real estate market have made Vancouver housing markets with restricted affordability. But the United States, the country’s southern neighbor, is oppositely experiencing such situation.
Fiona Anderson, a financial expert, examines the big difference when it comes to home affordability between Vancouver and the United States. She cited a report from BMO Capital Markets which indicated that mortgage rates as well as home prices in the United States have significantly decreased. The average payment for the mortgage is less than 15% of the median income.
Also, the statistic highlighted that the key problem in the state of Vancouver includes mortgage taxes, payments and utilities accounting for 90.6% of the household pre-tax income which was revealed by the RBC study regarding home costs. This percentage is made by the comparison of the average home price to the household income in the said area, presuming that a 25% down payment as well as a 25-tear amortization.
Hence, the housing affordability levels are indeed quite better in most areas in Canada while posing a little threat to the overall housing demand reported by RBC. Considerably, the Vancouver area market consistently becomes a major exclusion bearing a sky-high property value in the upscale districts making these places extremely much affordable but more at risk for downward correction.
Previously, the Real Estate of Greater Vancouver explained that home prices in the areas are up 7.2%. Due to Canadians low income generation challenged with high real estate prices, US are much more affordable than Vancouver.
In Vancouver, the average home price is 11.2 times family income average which shows unsustainable economy. Although, the city is thriving to develop better ways on how to make the home-ownership much more affordable such as use of small homes and increased density. The city usually ranks high or tops on lists of the “world’s most livable cities” but residents look uncertainly at its most recent peculiarity as the “most expensive city” in North America.
The Economist Intelligence Unit reported that it is now more costly living in the city’s on the edge of rainforests than in NY. Vancouver is yet far from the “most expensive city” in the whole wide world. That honor belongs to Switzerland, Zurich that has displaced Tokyo, the previous Number One in the 2012 Worldwide Cost of Living Survey. Today, Brazilian and Canadian are much costlier than US cities according to the Economist release.
Vancouver’s wacko home prices along with increasing costs in major Canadian cities like Calgary and Toronto must provide politician pause. It’s incumbent upon politicians to keep affordability when making policies. And due to the cost of living increasingly becoming a pressing matter for people living in the three major cities in Canada.
For those who want to keep living costs at bay, especially to Canadians now that they are facing such challenging living, income should be generated much higher than before to stay on the flow of the economy in Vancouver and live in the city more comfortably.
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