Housing Crisis In A Nutshell Part 2

A week or so ago, I published the first post in  this series which showed that a typical townhouse in Grandview was completely out of reach for the median income family in Vancouver.

Some people may have thought that a high-end townhouse was a bad example to use, even though they are being pushed on us as “affordable” alternatives in the Grandview Community Plan. Therefore, today, I present to you a 706 sq ft one-bedroom apartment currently on sale for $738,000.

Assuming our purchasing couple making the median Vancouver family income of $75,000 has somehow managed to secure the $73,800 down payment, their combined income is still barely half the $139,107 needed to qualify for a mortgage.

Even if the bank or other lender looked the other way on their income qualification (highly unlikely), the annual mortgage payments of $36,612 would be 49% of their gross income, and probably closer to 80% of their net after taxes and deductions.  This is, of course, way above the 30% of gross considered as the definition of affordable.

None of this is new news, but it cannot be repeated enough that the housing market in Vancouver is in a crisis of affordability. Most of our population cannot even consider buying anything whether it be a house, a townhouse, or even a tiny apartment.  And when the  other alternative —  purpose built rentals — are being offered at rates well above affordability, then we know the market is truly broken  and Vancouver has become a ghetto for the privileged only.

The government in Victoria presented us yesterday with some high-flown rhetoric concerning affordability: the proof of the pudding will be in the budget next week and whatever specific proposals are made thereafter.  We cannot wait any longer.

 

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5 Responses to Housing Crisis In A Nutshell Part 2

  1. DonGar says:

    Only a $1000 a sq foot. That is cheap when compared to new $1800 plus mountain blockers downtown, west end etc.

    http://www.macleans.ca/economy/realestateeconomy/andy-yan-the-analyst-who-exposed-vancouvers-real-estate-disaster/

    • jakking says:

      Comparatively “cheap” is irrelevant. It is whether they are affordable.

      • DonGar says:

        Being a devils advocate they keep selling so they are affordable to someone.

      • jakking says:

        Yes, they are affordable to speculators and those who already have property to sell. They are NOT affordable to the majority of Vancouver families seeking to get into the market.

      • Alex Greenfields says:

        “affordable to someone” is an argument so facile that not even the devil would use it. Normally only a Vancouver councillor can sink to that level of callous stupidity.

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