NEWS: Economy Flat, Housing Costs Soar
By Think City Staff
Is your rent going up faster than your income? Does that first rung on the property ladder look too high to reach? You’re not alone.
Despite the lingering effects of the recession, housing prices in Metro Vancouver continued to rise in 2009. The Greater Vancouver Real Estate Board reported that the typical detached house in the Vancouver region is now worth $788,499, up 1.3 per cent over last year, while the typical apartment now sells for $385,487, an increase of 0.6 per cent.
Tenants faced even steeper increases as rents increased by an average of 3.8 per cent - the maximum allowable increase. Despite a dramatic increase in the vacancy rate from 0.5 per cent to 2.1 per cent, there was no noticeable reduction in the rate of increase for rental accommodation.
Benchmark prices for typical properties were highest in Vancouver, Burnaby, Port Moody, and on the North Shore. In contrast, Maple Ridge, Pitt Meadows, Port Coquitlam, and Surrey were among the relatively more affordable areas – if affordable means that a typical house can be found for less than half a million dollars.
According to the Canada Mortgage and Housing Corporation’s December 2009 rental market survey, Vancouver once again took top spot with the most expensive rental housing in the country. The average two-bedroom apartment in the region rents for $1,169. This represents a 3.8 per cent increase in average rents over the previous year.
During the same time period, Statistics Canada's consumer price index showed an increase of only 0.4 per cent in British Columbia – in other words rents increased almost 10 times faster than inflation in 2009.
This means tenants in the average two-bedroom apartment would need to bring home a net monthly household income of $3,900 to achieve the CMHC's definition of affordability – that housing costs not exceed 30 per cent of household income.
Investor-owned condominiums account for a significant source of the available rental housing, but these units are, on average, more expensive than the older rental housing stock. Almost a quarter (23.8 per cent) of Vancouver's condominiums are rented. An average two-bedroom condo in Metro Vancouver rents for $1,448 month, almost 20 per cent more than a comparable apartment in a rental building.
Although the brisk pace of condominium construction in Metro Vancouver over the past two decades has increased the supply of housing, it hasn't been enough to moderate rising housing costs in the region.
At the same time, provincial and federal governments retreated from financing new non-market housing, and affordable housing strategies have mainly focused on increasing the supply of market housing. The most recent data suggests that not only is this approach is failing to moderate Vancouver's affordable housing crisis, but we are, in fact, losing ground.
Vancouver may be pretty, but it is quickly pricing itself out of the market as employers and workers seek out locations where a decent standard of living can still be had at a reasonable price.
Bold housing proposals and significant political reforms are needed if Vancouver is to meet this challenge. Over the next few months, Think City will be exploring a series of ideas to respond to Vancouver's affordable housing crisis.