The median cost of a Vancouver home currently stands at $672,000 – but while certainly elevated, it is still lower than San Jose (15% lower) and San Francisco (26% lower), the most expensive markets in North America.
Andy Yan, director of Simon Fraser University’s City Program, argued in his latest study that what really drives Vancouver’s lack of affordability is the sheer gap between wages and home prices.
Vancouver’s median household income is $61,036 annually, less than other mid-range U.S. cities like Omaha, NE; Kansas City, MO; and even rural Lancaster, PA.
Considering that home prices in Vancouver have triples since 2005, it is unsurprising that households will find it daunting to close the affordability gap, Yan said.
Read more: Multi-bedroom homes a fading dream for most Canadians – report
“You need one of two things: either Vancouver real estate prices need to halve to attain a certain level of affordability, or you need to double incomes,” Yan told Bloomberg.
Yan warned that because of this delicate situation, a major correction would be “potentially devastating” for the city’s housing market, especially since housing plays a major role in the local economy and real estate development is B.C.’s largest industry at the moment.
Home sales in the city fell to the lowest levels in 5 years last month, amid housing supply reaching a 3-year high.
Is the Vancouver rental market’s price growth subsiding?
Land transfer taxes pose another layer of consumer burden – study