Looking for a new home this year? You’d better have a big budget. According to findings from SFU researcher Andy Yan’s annual “million dollar line” report, the percentage of homes in Metro Vancouver that cost more than $1 million skyrocketed from 28% in December 2015 to 43% in December 2016.
This substantial increase highlights the state of single family homes in the city and the affordability crisis for middle income families.
To further examine affordability, the study also compared homes prices outside the city. These homes, such as those in Langley or Port Coquitlam, are generally lower priced than those in Vancouver. However, transportation and other factors in affordability tend to drive up the actual cost. According to Yan, “The cost of transportation can actually be an iceberg to affordability in the region.”
Indeed, many of these homes are below the $1 million line, but when transportation costs are added to the equation, most of them will fall into the $1 million category within a 25-year time span.
Yan also recommended that a shift in the discussion as to what a “single family” home really means should be considered, as the idea of the traditional form of a single family home is dying off in the age of unaffordability. Specifically, Yan suggests “a series of housing choices for families that will be more dense, but also have a high level of design” to be looked at as a possible solution.
With ownership traditional single family homes becoming ever more out of reach for many of Vancouver’s residents, many look to the suburbs to find lower-cost real estate. It is wise to remember, however, that affordability goes far beyond the listing price. Transportation costs, available jobs, and more are all strong factors that tie into affordability. Yan concludes, “This really highlights how affordability isn’t a number, it’s a calculation.”
It will be interesting to see how 2017 plays into that calculation.