Vancouver’s housing prices 2nd most unaffordable in the world
An urban planning think tank says Metro Vancouver has the second-highest housing prices in the world when compared to local incomes.
Demographia compared urban areas with over 1,000,000 residents in OECD countries around the world.
They say Vancouver’s “strong urban containment policies” have caused the city’s affordability to “deteriorate markedly.”
The average house price in Metro Vancouver is $670,300, which would require 80 per cent of the average median household income to service the mortgage. That’s more than 2.5 times the 32 per cent guideline set out by Canadian Mortgage and Housing Corporation.
Tsur Somerville of the UBC Sauder School of Business says that Vancouver is a very desirable city to live in, and that comes with a cost.
“Within North America, we are an expensive place to be, because lots of people want to be here, we have great amenities, and we don’t have a lot of land. Plus, we have 40,000 people coming here from overseas with assets to purchase houses and other things.”
Somerville says if you want to live in Vancouver, be prepared to earn less than people doing the same job in other major centres.
“Places that have a lot of amenities and are places that people really want to live, pushes up house prices, but also lowers wages, and employers are paying people less who are willing to take a lower paying job to be there. So you get a higher price-to-income ratio.”
He says companies face challenges when staffing their Vancouver offfices.
“Vancouver faces challenges because of housing prices – for a lot of firms, hiring people is hard unless people are willing to pay the price for living here,” says Somerville.
When cities with lower populations were included in the survey, Victoria, Kelowna and the Fraser Valley ranked amongst the most unaffordable cities in Canada.
The most unaffordable major city in the world is Hong Kong, with an average house price of $4,024,000 and median household income of $270,000.
San Francisco-Oakland is the third most unaffordable city in the world, with an average house price of $705,000 and a median income of $76,300.