Home Ownership Affordable in the North
Friday, April 20, 2012 @ 3:59 AM
Prince George, B.C.- Never mind the recent report from RBC Financial Group which pegged B.C. as the least affordable province in which to buy a home.
The BC Northern Real Estate Board has commissioned a study which shows Northern B.C. is VERY affordable when it comes to buying a home.
The BCNREB report shows the costs in Northern BC are about 30.8% of median family income, compared to 70.2% for the entire province.
The report shows that owning a home in the northern region eats up far less of a household’s income compared to the burden of home ownership in Vancouver.
In Vancouver, it is estimated 90.6% of a family’s pre tax income is needed to cover the cost of a mortgage, municipal taxes and fees and utilities. The costs of home ownership in the north are about one third of that with 30.8% of a northern family’s pre tax income needed to cover those same costs.
The BCNREB says the major reason for the widening gap in Vancouver is the cost of housing, where prices continue to climb. In the north however, prices have remained relatively unchanged over the past couple of years, with the exception of Mackenzie where a sharp increase (23.1%) was noticed as the community recovered from a downturn. Yet, even with that increase in prices, the average home in Mackenzie is selling for $110,500.
Here are the community by community percentages of pre tax income needed to purchase a home.
- Prince George 31.4%
- 100 Mile House 46.7% (under reporting of incomes combined with recent housing price surge)
- Williams Lake 31.9%
- Quesnel 26.0%
- Smithers 32.2%
- Prince Rupert 29.2%
- Fort St. John 32.3%
- Terrace 32.3%
- Kitimat 15.3% (highest median incomes combined with low housing prices)
- Mackenzie 21.8
Comments
I have a feeling houses in this area are going to become even more affordable as a direct result of that report that hit the news a couple of days ago about the pine beetle epidemics future impact on jobs in the forest industry.
“The full, devastating impact of the pine-beetle epidemic that has swept across British Columbia will be felt in the next few years when up to half the forest-industry jobs in the provinceâs interior will vanish, according to a government report meant to be confidential.
The document, a briefing report for the provincial Forests minister, was inadvertently posted on the internet. It gives details on the unfolding timber supply crisis that threatens âthe short and medium-term sustainabilityâ of communities that have depended on logging for generations.
The document suggests possible responses to temporarily blunt the impact of the crisis â including allowing logging in old-growth areas that have long been set aside to protect the overall health of the forest.
The forest industry has been racing to harvest those dead trees before they lose their value. But the report warns that when the forests killed by the pine beetle are logged out, there will be a period â lasting decades in some areas â in which the amount of harvestable timber available will fall dramatically.
And as the timber supply dwindles, forestry jobs in the B.C. interior will melt away. The current 22,890 jobs across the region could fall to just 10,808 within a few years, a stunning decline of 52 per cent. Prince George alone could lose more than 6,500 jobs.”
http://www.theglobeandmail.com/news/national/british-columbia/confidential-report-warns-pine-beetle-set-to-destroy-bc-forestry-jobs/article2405913/
Housing is always more affordable on an undesirable area.
The real estate board should of published the median income number so real comparisons can be made.
Let’s get real. 90% of after tax income for a place in VCR. I guess the buyers quit eating, driving, and clothing themselves. Could you even qualify for a mortgage?
As someone else said. The more desirable the place is to live the higher the cost of housing. PG with its unkept boulevards, air pollution, high taxes, and extremely poor roads, ranked 156th worst place to live out of a total survey of 180 cities in Canada. This in itself along with declining population are the main contributing factor to lower home prices.
You forgot fluoridated water and the crime capital of Canada.
Just wait until the banks stop lending to the sawmill workers.
“Prince George alone could lose more than 6,500 jobs.”
The houses should get a whole lot cheaper then.
If the Mills cut back by over 50% you wont be able to give your House away
If the Mills cut back by over 50% you wont be able to give your House away
People keep forgetting how interest rates affect mortgage payments.
If you have a $200,000 loan at 2% compounded interest over 20 years, you are looking at monthly payments of $1,011.77
At 4% your payments increase to $1,211.96.
At 8%, your payments increase to $1672.88
At 11% your payments increase to $2,064.38
If you were in Vancouver with a 40 year $1,000,000 mortgage for a leaky condo at 2% compounded interest, your payments would be $3,028.26 a month.
At 4% your payments would be $4,179.38.
At 8% your payment would be $6,953.12
At 11% your payment would be $9,282.94.
What do you think will happen to property sales around the country if interest rates spike? I’m betting we’ll have wide scale bankruptcy or a rash of fires in some very expensive houses.
People interested in these things may want to look at the new proposed guidelines on Loan-To-Value ratios for mortgages.
Fire up google and search for,
“osfi ltv proposed guidelines”
If you’re interested
Remember, when you pay off a loan you pay the interest off before the principal, and unlike in the USA the interest on a mortgage is not tax deductible.
“The BC Northern Real Estate Board has commissioned a study which shows Northern B.C. is VERY affordable when it comes to buying a home”
Yeah, so what? If that’s all that mattered, then Northern BC would be seeing population growth. It isn’t and yet the areas with much higher housing costs are. How does that reconcile?
For what it’s worth, outside of the MAJOR markets in Canada, I wouldn’t say that Northern BC is any more affordable than most other places in Canada. Actually, in many cases it may be more expensive.
I just had a look at MLS and honestly, the houses listed for $500K in PG aren’t that far off of the houses listed for $500K in the outlying suburbs of Ottawa, except that the neighbourhoods out here are planned MUCH better than PG. It was similar when I moved out here.
The smaller communities on the outskirts of Ottawa are much cheaper for a similar home than they are in Ottawa. Head over to Gatineau and they are even cheaper yet. This is the same story for most places in Ontario that I’ve browsed at (obvious exceptions for the GTA, prime downtown locations in Ottawa, etc.).
It all comes down to spin. Comparing Vancouver to PG is goofy and the Northern Real Estate board should know better. I suspect reporting some realistic comparable hurts the story though because PG and area may not look so much like a “deal”.
Affordable until interest rates rise…and rise they will.
It also depends on where you live in the north.
The one thing that always seems to get missed,particularly by these real estate boards when they launch these pump and dump campains,is interest rates.
When rates start rising,they will do it rapidly.
The houses that are affordable today, will not be so affordable later.
That is when the stinky stuff will hit tha fan!
NoWay:”You forgot fluoridated water and the crime capital of Canada.”
The North has the highest cancer rates in B.C.
The North has been enduring fluoridation of tap water for the longest time period in B.C. and it still has it!
Coincidence? Perhaps not!
Victoria and Vancouver have never had fluoridated water, as have many other B.C. communities. Some decades ago many discontinued this practice, some just recently like Lake Cowichan and Williams Lake.
Some communities have a small natural concentration of natural calcium fluoride in well water and water from aquifers. Prince George has a low concentration. But the hydrofluorosilicic acid industrial effluent fluoride which they insist on adding is very different from natural calcium fluoride, it being highly insoluble.
The nasty stuff they use for *topping up* is highly soluble and consequently the organs of the human body are directly affected by it and the contaminants it contains.
It’s a health risk and it should not be added to water anywhere!
I agree PrinceGeorge!
I am suprised they are stll using it considering the opposition to that crap!
It is very tough to get mortgage refinance these days especially major banks. It is not a secret every one knows, what is the solution? Check our your local guys or check online for 123 Refinance they should be able to find a solution for you.
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