Once more I smell a rat in a presentation f statistics from a survey. From my own experience as a mortgage investor in Canada, your mortgage payment, taxes and house insurance should not exceed 30% of your gross monthly income.
So how does the rest of the province qualify to get a mortgage in he first place?
All it may mean is you did qualify at one time for your house, but the value has tripled. So once again, how would a new buyer qualify if the numbers given here are correct?

Median income in Prince George is around $41000.00 per annum.\

Not much when you consider the cost of a new home.

“your mortgage payment, taxes and house insurance SHOULD not exceed 30% of your gross monthly INCOME.”

The important words are highlighted. Everyone has different lifestyles and spends money in different ways so there is some flexibility due to that.

The household income generally does not include an “extended family”.

The extended family could be a group who each own a share of the house, or it simply could be an individual who owns he house and rents rooms out with joint use of common living spaces. I understand that is fairly common in Vancouver.

It uses median household income which I believe is over $70,000. The $250,000 house, with 25% down means a mortgage of around $190,000. So, that is what we are talking about in this article.

I wish they would show the median family incomes they used … would cut all speculation on our part.

Where’s Charles with his usual doom and gloom?

The linked information is dated ….

http://www.city-data.com/canada/Prince-George.html

2005 – Prince George
Families median income in 2005: 72,698 CAD
Households median income in 2005: 60,576 CAD

I noticed that there are 59,795 People in common-law relationships

WOW!!!!!! Not a good page for data accuracy I would guess …. LOL

allow me JB:

“you wont care about house prices once the stock market crashes and the government takes your house and enslaves your family in a coal mine”

How’d I do? :D

Our illustrious Initiative’s Prince George shows the average Labour Force Income in Prince George to be $40,559.00.

Do we dare contradict their numbers.????

The reality is that the cost of housing has risen faster than the cost of income so to afford a home we all sacrifice a bit more. Welcome to the reality that generations X, Y and Z will be the first generation to have it finanically tougher than the last in a long time.

Coalmine!! Luxury, I was thinking Salt Mines ;)

Born: “Welcome to the reality that generations X, Y and Z will be the first generation to have it finanically tougher than the last in a long time. “

Yup, the days have passed when you could get a good career with a grade 10 education. Stay in school, learn a trade, find a marketable skill, and you’ll be fine.

If you can’t afford to buy… rent.

What is not said here is that you are paying the lowest interest rates in history.

When house prices where a third what they are right now your interest payment was 3-times what it is now for your average house with 25% down. The payment and the debt cost to income ratio changes little, but the ramifications to new entrants is enormous. The reverse market capitalization will happen to home values when interest rates go back to normal so that pensioners can be rewarded for saving.

Saving 25% for an $80,000 home is a lot different than saving 25% on a $300,000 home… so its the new entrants to the housing market that are out in the cold with current interest rates… as well as the retired pensioners with safe bond investments.

The housing market is a interest rate driven bubble that is unsustainable. It will hurt a lot of people when things correct.

It should be if the interest rats are low the down payment should correspond and be lower as well… If the interest rates are high, then so should the down payment.

That is if it was really all about market risk as a driver of interest rate policy and not manufactured markets. Harper changed the rules and is going against the grain trying to cool the market with policy intervention that will do more harm than good. If down payment requirements were increased than so should have the rate if risk reward was in sync.

“when interest rates go back to normal”

What is normal? They were as low as they are now when my parents bought their house in 1957. They were 14%+ when I built mine in 1977. Looking at 1957 and at 2013, I see those as normal years and 1977 as abnormal years.

It has been a good 20 years or so since those who chose variable interest rates when renewing mortgages versus fixed have been winning the game of chance.

I do believe that the intent is to make sure that there is enough equity in the house that in the event interest rates rise there is a bit of a cushion to land on at the time of mortgage renewal to allow the owner to stay in the house in the hopes that the rate will reduce by the next renewal.