Affordability, availability and living in a world-class city

Living in Vancouver, the topic of real estate seems to come up in conversation often. As least as popular a subject as the persistent rainy weather, home prices are right out there in the open, on everyone's minds and are a matter of heated debate across the board.

We are fortunate to experience the reality of living and working in a world-class city, consistently rated amongst the very best places to call home. With mild weather, fresh air, healthy lifestyles, great transit, an engaging creative and entertainment scene and more, Vancouver is certainly earning this reputation. The flip side of course is a consistent shortage in availability and concerns about affordability that affect everyone in the residential real estate market. These can be frustrating and confusing issues for those who may be worried about the possibility of single family detached home ownership becoming an unrealistic possibility, but it's an expected consequence of Vancouver growing up and living up to world class city status. 

Considering what Vancouver has to offer, it's not surprising that over 40,000 people are moving to the city every year, compounding issues of availability and affordability in the housing market. 

That being said, there are clear strategies in the path toward home ownership, often achievable by tweaking expectations to reflect the current market realities. While there is a lack of supply in the detached home market, often resulting in competitive multiple offers on desirable properties, there is currently a boom in building of new high density communities, both in the metro Vancouver core as well as in energy centres along rapid transit lines.

Affordability remains a major concern for those who are not currently in their "forever home", and for good reason. The costs of home ownership for detached homes have soared to 109% of median income in the city,according to RBC*, although condos remain a much more affordable option for many Vancouverites, with ownership costs sitting at about 44% of median income. According to the 2016 Knight Frank Wealth report, Vancouver home prices saw a 24.5% average price hike in 2015, topping a list of 100 global cities by a significant margin (only 10 cities globally saw double-digit price hikes last year), while simultaneously experiencing the lowest supply in 25 years. “A lack of supply, coupled with foreign demand, spurred on by a weaker Canadian dollar explain the city’s stellar performance,” the report noted.

Again, signs point towards increasing density as a solution, and we are seeing this on the ground as some buyers gravitate towards condos from the value end of the spectrum all the way through to luxury executive product.

2016 picked up where 2015 left off, with single family homes in Greater Vancouver in short supply amid strong demand,” said Gregory Klump, CREA’s Chief Economist. “Tighter mortgage regulations that take effect in February may shrink the pool of prospective home buyers who qualify for mortgage financing and cause national sales activity to ease in the months ahead.”

And finally, each month the rennie Review takes a detailed look at the real estate marketplace in Vancouver and the Lower Mainland, as well as nationally. This report examines the labour force, migration, economy, market stats and more.

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