Led by soaring prices for single-detached homes, real estate affordability in Vancouver has never been worse, according to RBC’s Housing Trends and Affordability report for the 2015’s fourth quarter, released February 29.
The costs associated with ownership of single-detached homes in the city have soared, reaching 109% of median income. To put this in perspective, the national average is 51%.
“With an average price exceeding $1.2 million, single-detached homes [in Vancouver] have long since slipped out of reach for the average local homeowner,” RBC said in the report.
“This implies that only a select few wealthy households can afford to own such properties at market prices.”
Condos remain a much more affordable option for Vancouverites looking to purchase a home, with these properties selling for, on average, around 44% of median income. Nationally, this figure drops to just over 35%.
“Condo apartments [in Vancouver] claimed the highest share of existing home sales in the area of 2015—42% of total,” the report said.
“Given the extremely tight demand-supply conditions currently in place, affordability-related pressures are unlikely to subside anytime soon in the area.”
Home resales in the city jumped 28% during the quarter to 43,000—a record high—and prices soared 11%.
RBC called the falling affordability a “worrying” side effect of the housing boom in Vancouver.
“Conditions in Vancouver…show increasing signs of overheating in single-detached segments where home prices have skyrocketed in the past year,” the report said. “Owning a single-detached home at market prices in the Vancouver area clearly is out of reach for an average household or for the vast majority of households for that matter."