Vancouver’s affordability saga continues unimpeded as the city’s single-family homes are now priced considerably above the median household income, according to a recent study by the National Bank.
The analysis uncovered that the average monthly mortgage payment for a median-price single-detached residence in the Vancouver CMA was around 101.5% of the region’s average household income.
National Bank stated that this was an unprecedented high, representing increases of 2.7% quarterly and 6.4% annually, Business in Vancouver reported.
Falling salary growth combined with recent increases in interest rates were cited by the study as the main contributors to the trend, despite the fact that the median price of Vancouver’s single-family homes during Q4 2018 went down by 0.7% quarter-over-quarter, and had only a modest 1.8% year-over-year uptick.
Condos experienced a similar cooling, with the mortgage for an average-priced unit in the Vancouver CMA accounting for 49.2% of household income during the fourth quarter, increasing by 1.3% from Q3 2018 and 6.3% year-over-year.
A January report from Altus Group warned that there seems to be no relief in sight for would-be home buyers in Vancouver, as the market is “exhibiting the most potential for downside risk,” Altus stated.
Aside from pricing issues, growing construction and borrowing costs will likely stagger sales levels in 2019.
“A key challenge that has become more apparent as of late in Vancouver has been the price sensitivity of consumers, with higher priced projects, or those priced above the competition, experiencing below average sales rates,” Altus explained.
Are you looking to invest in property? If you like, we can get one of our mortgage experts to tell you exactly how much you can afford to borrow, which is the best mortgage for you or how much they could save you right now if you have an existing mortgage. Click here to get help choosing the best mortgage rate