Metro Vancouver's real estate prices are steadily increasing, making the housing costs less affordable. Despite the decline in fixed mortgage rates, housing affordability in Metro Vancouver is slowly diminishing. The increase in real estate prices is not isolated to Vancouver only as affordability for homes has decreased for the province as a whole. On a more positive note, the market seems to be back on track due to the increase in real estate prices. Not only is it back on track, it appears to be the strongest it's ever been in the past 3 years. While this is great news for the market, it isn't for home buyers. There has been a recent increase in home buyer demand which puts Greater Vancouver in the upper reaches of a balanced housing market.
The graph below shows ownership costs as a percentage of household income. Essentially, it is the percentage of pre-tax income that the average Vancouverite needs to service the costs of owning a home. Condos are the only home type that are an anomaly in the increasing trend in housing prices in that it remains relatively stable in affordability. Owners are spending 39.9% of pre-tax income on condos which is a slight decrease in contrast to the previous quarter. Two-storey housing units are sitting at about 86.5% and bungalows are slightly lower at 82.4%. It is said that the average British Columbian must spend 68.4% of their income for housing.
*Source: RBC Housing Trends and Affordability
For more information on this quarter's current real estate market and economic factors that affect it, check out the Q1 State of the Market Report produced by Urban Analytics Inc.