Home Ownership Still Possible In North

Monday, May 21, 2007 04:31 AM

The BC Northern Real Estate Board has released its own study on housing affordability, and it says Northern B.C. is still a great place to live and buy.

Despite average house price increases of 30% across northern British Columbia in 2006, owning a home in the region consumes a much smaller percentage of household income compared with the burden of home ownership in Vancouver.

For 2006, the Housing Affordability Index (HAI) for northern British Columbia was 28.9% compared with 68.5% for Vancouver. The index estimates the proportion of pre-tax median household income needed to cover mortgage costs, municipal taxes and fees, and utilities for single-family homes.

What the index means is that the typical household in Vancouver will spend almost 70% of its pre-tax income towards home ownership while the typical household in northern BC spends less than 30% of its pre-tax income on home ownership. This positive difference in affordability has persisted despite double digit increasesin sales and prices of single family homes in northern BC.

By far the largest contributor to the difference is relative house prices.

The graph below, shows the percentage of pre-tax income needed to own a home in the various communities and the increases over the past few years:

Estimates for the period 2003 through 2006 show a general increasing trend in the index. That is, with ever increasing house prices and relatively slower income growth, households require an ever greater portion of their income to support the cost of home ownership.

Even though nearly all of the regions reviewed, including Vancouver and the BC average, showed a significant increase in the index between 2005 and 2006, northern B.C. is still more affordable.

Previous Story - Next Story

Email |

Print |

Facebook |

Twitter |

Digg |

Del.icio.us

Posted on Monday, May 21, 2007 04:31 AM in News by 250 News

Return to Home

Comments

Posted by: acrider54 on May 21 2007 7:51 AM

Affordable for who? Sure as heck ain't for the minimum wage earner families and some middle earners as well unless everyone in the family works.

Posted by: lmorg on May 21 2007 8:27 AM

There seems to be a lot more houses springing up on to the market in lower college hts lately, as the market picks up for summer. Hopefully more supply will keep prices down.

Posted by: Runner46 on May 21 2007 1:21 PM

Imorg, you are seeing correctly and your assumption is also correct. The increases we have seen in the past 18 months have stopped in their tracks. Ask any REALTOR and they will tell you that it has shifted from a sellers market to more near normal and almost a buyers market.

Posted by: Runner46 on May 21 2007 1:22 PM

Acrider54.....Sad to say but, welcome to the 21st Century.

Posted by: owl on May 21 2007 1:39 PM

Home ownership is still possible in the south too. Not only that, but many of the "homes" are second homes. It used to be that those who were in the middle to upper middle economic range could affrod a cottage. Those cottages have made some people quite a bit of money in their retirement years as people are upgrading them to "homes" and retirement homes.

As you say, affordable to whom?

Posted by: owl on May 21 2007 1:52 PM

Then there are time shares. In the Kelowna area, for instance, I have notice 2/12 time shares; 2 bedroom furnished "luxury" condos ... 15th to 20th floor ... on lakeshore ... $150,000 - $175,000 + condo fees ...

So ... let's say you can use that for 10 years ... that's $300/night ... + condo charges ... and at the end of the 10 years, with any luck, you will be able to cash it in for at least as much in 2007 dollars as you paid for it .... that should ste someone up in a reasonable extended care facility with the government paying the remainder.

So, for those who have it, they can get it. And there seem to be more and more who can afford it as we see the baby boomers starting to retire. The Okanagan is most definitely one of the places in BC where one can observer that happening.

Could it happen in PG? Possibly to a small extent. Not everyone wants hot climates. Not everyone wants to sit on a lake with muscle power boats breaking an otherwise idylic day.

Posted by: Chadermando on May 22 2007 12:30 AM

I think the whole study is balderdash. Northern BC has a lot of people like truckers, farmers, and other entrepreneurs that have a high personal income before taxes in addition to high investment costs association with a personal business skewing any apples to apple comparision of income to home ownership cost ratio's.

Facts are at best a house East of the bi-pass in PG is not a comparable house as one in West Vancouver. Nor is an acrage property or farm as compared to a condo.

PG has a lot of high cost trash housing passing as a Vancouver fixer upper. Problem is not many people I know live in PG to pretend that they are living in Vancouver, so a house that on paper looks cheep in PG is actually a rip-off for the most part when compared to lifestyle.

I think it all comes down to affordable land availability. Probably 95% of square footage in the last 30 years is higher end housing with little to no land set aside for low income neighborhoods. Places like the Hart where a person could own an affordable yard and put a trailer on it.

The idea of low income housing these days is the planned neighbourhood by a single developer with glorified cages built to an engineers specified design all done as part of a government grant. I see no planning for low cost self build neighbourhoods.