A new report by Vancity has found that over the past year, housing affordability in most municipalities in the Lower Mainland and Greater Victoria has gotten worse, decreasing in some by as much as 38 per cent.
The report, “Home Stretch: Comparing housing affordability in B.C.’s hottest markets,” tracks the affordability of 30 municipalities over a one-year period ending on February 28, 2017.
The areas most affected by a drop in affordability were suburban municipalities outside of Vancouver where buyers have traditionally looked for more affordable housing options. While the overall affordability of residential properties sold in Vancouver worsened by just three per cent for the year ending February 28, 2017, affordability dropped by:
* 38 per cent in North Vancouver District
* 31 per cent in Delta
* 29 per cent in Langley Township
* 24 per cent in Mission
* 23 per cent in Abbotsford and Maple Ridge and
* 17 per cent in Sidney.
Only two of the 30 municipalities – Richmond and White Rock – saw affordability improve over the same period, increasing by one per cent overall.
The affordability of each municipality is calculated using overall median housing prices and median incomes (the report also calculates affordability according to housing type).
The widespread decrease in affordability came despite a cooling of sales in the Metro Vancouver market in the latter half of 2016 following the introduction of a 15-per-cent property transfer tax on foreign nationals’ purchases of residential real estate within Metro Vancouver.
The report shows this cooling was seen most at the top end of the market, where the average number of properties in Metro Vancouver that sold each month for $4 million or more (mostly detached homes) decreased by 68 per cent in the eight months following the introduction of the new tax. At the market’s lower end, the number of units that sold for less than $500,000 (most often condo apartments) declined by 38 per cent.
The numbers in this report identify trends that were happening even before the onset of this spring’s home buying season. Unlike monthly real estate metrics, the report uses comprehensive data available from Landcor Data Corp. based on actual sales of new and resale properties, year over year. Processing this data, which is based on the transfer of land titles, takes about two months to complete and provides the most accurate picture of house price trends.
The report also found some pockets of affordability throughout the region, especially for those seeking to purchase an attached home or condo apartment.
At the end of February 2017, the two most affordable municipalities to purchase a condo apartment were Chilliwack at $174,500 with a 12.6% gross debt service ratio (GDS*), and Sooke, where the median price was $219,000 (13.1% GDS). Sooke was also the most affordable place to purchase an attached property at $321,500 (19.2% GDS), followed by Mission at $315,000 (23.1% GDS).
[*Gross debt service ratio (GDS) is the percentage of a household’s gross monthly income required to cover mortgage costs, property taxes and maintenance (such as strata fees and heating).]
“Buyers looking for affordable housing options used to be able to look to municipalities around Vancouver to find affordable options. While pockets of affordability still exist, they are disappearing as prices in the Fraser Valley and other parts of B.C. continue to rise,” said Ryan McKinley, Vancity’s senior mortgage development manager.
USING the median household income for their region* compared to the median price of all property types (detached, attached and condo apartments), here are the 10 most- and least-affordable municipalities overall for the year ended February 28, 2017, ranked by GDS ratio.
[*Median household incomes for Vancouver, Victoria, Abbotsford-Mission and Chilliwack CMAs were used.]
Most affordable: Median price* / GDS
- Langley (City): $271,250 / 18.4%
- Sooke: $405,000 / 24.2%
- Victoria: $429,950 / 25.7%
- Esquimalt: $449,450 / 26.9%
- Chilliwack: $385,000 / 27.9%
- New Westminster: $430,250 / 29.3%
- Sidney: $495,000 / 29.6%
- Pitt Meadows: $450,000 / 30.6%
- Port Coquitlam: $470,950 / 32.0%
- Abbotsford: $472,870 / 34.6%
Least affordable: Median price* / GDS
- West Vancouver: $2,821,500 / 191.8%
- Lions Bay: $1,425,000 / 96.9%
- North Vancouver (District): $1,360,000 / 92.5%
- Oak Bay: $1,045,000 / 62.5%
- Delta: $855,000 / 58.1%
- Bowen Island: $780,000 / 53.0%
- Vancouver: $715,000 / 48.6%
- North Saanich: $800,000 / 47.9%
- Squamish: $535,000 / 42.8%
- Langley (Township): $625,000 / 42.5%
[*Median price: Based on all sales for the 12 months ending February 28, 2017, using real estate data from Landcor Data Corp.]
Backgrounder: Vancity’s investment in affordable housing