Thursday, February 09, 2017

Vancouver housing ranked 3rd most unaffordable

From the CBC.

http://www.cbc.ca/news/canada/british-columbia/demographia-international-housing-study-vancouver-ranks-3rd-1.3947668


For yet another year, Vancouver has the dubious honour of being one of the most unaffordable cities for housing, according to an annual international study.
Vancouver ranks 3rd in the 2017 Demographia International Housing Affordability Survey, down one spot from 2016 when it was second.
The survey compares 406 metropolitan housing markets in nine countries: Australia, Canada, China, Ireland, Japan, New Zealand, Singapore, the United Kingdom and the United States.
It's the 13th edition of the report, which links median house prices to median household incomes otherwise known as the "median multiple." 
A value 3.0 or under is deemed affordable. Vancouver's median multiple is 11.8.

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 Quite the discussion of the Chinese effect here:
http://www.businessinsider.com/regulation-changes-in-china-could-crash-vancouvers-real-estate-market-2017-2

Excerpt: 

This will impact real estate around the world, but Vancouver is a particularly popular place for Chinese buyers. Using the foreign buyer data from the B.C. Ministry of Finance, we can see 4,515 units bought between June 2016 (the first month tracked) to November 2016 (last point available). The average price of units during those periods is CA$1,012,372 (US$776,091), around 14x the median household income of a BC family.
...
Not every one of the 4,515 buyers is going to default, but that’s the tip of the iceberg. B.C. has only been tracking foreign buyers for 6 months, and Vancouver has been a popular destination for Chinese buyers for much longer.  
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 From the embedded Demographia link in the first article:

There are 11 affordable major housing markets in 2016, all in the United States. Rochester is the most affordable, with a Median Multiple of 2.5, followed by Buffalo (2.6), Cincinnati (2.7), Cleveland (2.7), Pittsburgh (2.7), Oklahoma City (2.9), St. Louis (2.9) and four at 3.0, Detroit, Grand Rapids, Indianapolis and Kansas City.
 
I don't know about you but I can think of lots of reasons Rochester NY is affordable.
As to Vancouver, be sure to play: http://crackshackormansion.com/part2.html


26 comments:

Mike said...

would be interesting to see how many of those homes bought by Chinese were done "all cash"..I'm betting most of them..so probably won't be a foreclosure issue (for them at least) if the market crashes..

they run shopping shuttles from Vancouver BC down to the high-end malls in WA and as far south as Portland (no sales taxes)..the disposable income these people have is stunning..

Rob Dawg said...

I seriously doubt the "all cash" bit. Why buy one for $1m CND when you can easily buy three with 30% down and have a place to continue to stash questionable RMB ongoing? These are not Mainland refugees or expats. They are diversifying.

Mike said...

These are not Mainland refugees or expats

I think it's mostly that..they are looking to get their money out of China as quickly as possible..high end real estate is a great vehicle for that..

Mike said...

good article on this..

“Vancouver real estate is obviously at very high risk for being used as a transfer and holding vehicle for laundered money,”

http://www.moneysense.ca/spend/real-estate/8-factors-that-really-mess-up-vancouvers-real-estate-prices/

Lawyerliz said...

Agreed, Mike. Do they ever rent any out? Why does Vancouver want them if they are ruining Canada's way of life. I guess money is everything. If I were Chinese, I'd want a safe haven too.

Lawyerliz said...

Yeah, but I think they ate naive and inexperienced and 100 years behind us and still many got. Taken but Bernie Madoff, who should have known better

Lawyerliz said...

Are . . By

Mike said...

the more I look into this..the more interesting it gets..

In a recent six-month period about 70 per cent of all detached homes sold on Vancouver’s west side were purchased by Mainland China buyers, an academic case study shows.

Even more stunning, the study shows that of all self-declared occupations among owners — on homes worth an average $3.05 million — 36 per cent were housewives or students with little income.


later on in the article..

Yan noted the majority of the homes were mortgaged through Canadian banks. This suggests the banks offer services to facilitate investment from high-net-worth investors who face strict rules against transferring more than $50,000 per year from China. The study did not look at details of financing arrangements and how foreign exchange transfers were made.

so I was wrong about the majority being cash purchases..

http://news.nationalpost.com/news/canada/in-a-six-month-period-70-of-detached-homes-sold-in-vancouvers-west-side-went-to-mainland-china-buyers

Lawyerliz said...

So they calcute how mucheap house you can buy with5 50 K per year available?
Won't the Chinese start noticing this and try and get back at the banks? When do they figure out they can get liens and try to repossess the houses? Is it 50k per person, per family, or what?

Lawyerliz said...

Much each

Rob Dawg said...

I dunno. Mu-cheap has a ring to it.

Lawyerliz said...

My granddad was quite young when he came here. His English was flawless. He only had formal education through the 3rd grade but could read and write impeccably, besides understanding German. He was thoroughly melted into the pot, but I don't see why he couldn't have handed on a little german.

Rob Dawg said...

the more I look into this..the more interesting it gets..

Indeed. This is part of why I revived this blog.

Things are getting interesting again.

Lawyerliz said...

Anybody beside me notice how Slate has totally abandoned objectively with regard to Trump. Now I despise Trump, but I an not in the news biz. Slate is pretty specific on how they want to bring him down, in a way not even Fox was close to, ever. On the other hand, I can't imagine Trump staying prez for the next 3 years and 11 months. I thought he'd get a bit better upon becoming prez, instead he has gotten worse.

Lawyerliz said...

Yeah, that's a Chinese curse. I'm up for some boredom.

Lawyerliz said...

What if Trump wants to to take guns away from shooting Chicagoins?

Will Christian teapartiers get seriously mad at him?

Mike said...

So they calcute how mucheap house you can buy with5 50 K per year available?

can't be that..50K per year doesn't qualify you for a multi-million dollar house. Property tax alone can run you $30K for a $2 million house...

Mike said...

Guns are already illegal in Chicago...hasn't helped

Rob Dawg said...

Not just Slate but Vox, CNN and arguably the NYTimes. Mother Jones and several others were never even in the possibly category.

Mike said...

Yahoo, USA Today, Reuters..the list goes on and on

LBD said...

Guns are not the problem they don't care about laws and if they managed to take them away they would turn to other methods.

Rob Dawg said...

It is an interesting thing that municipal interests vice revenue and operating costs are essentially the inverse of home prices.

Mike said...

they don't care about laws

it's interesting that both Canada and Mexico have strong gun laws. Seems to work well in Canada (though they do have their occasional "incidents")..doesn't seems to help at all in Mexico.

Obviously there are other reasons besides access to guns that drives criminal behavior..

Rob Dawg said...

New post.

Lawyerliz said...

That really wasn't my point, whether guns are good or not, just more hostility towards Trump caused by his gun thoughts.

Rob Dawg said...

https://www.bloomberg.com/news/articles/2017-02-10/vancouver-s-empty-mansions-highlight-middle-class-housing-woes