BC Business
Crisis of affordability Two national banks have sounded the alarm: Vancouver is veering toward becoming dangerously unaffordable. On Monday both RBC Economics and National Bank published their takes on Vancouver’s affordability, comparing sales figures and price data with local median incomes. “Conditions in Vancouver show increasing signs of over-heating,” reads the report from RBC Economics, and despite limited federal intervention in 2015, “recent changes to mortgage insurance rules aimed at cooling high-priced markets may slow down price increases at the margin but we do not believe they will materially reverse current momentum.”
Both reports compartmentalize the most egregious excesses in the market for single-detached homes. After asking if the single-detached market is “detached from reality?” the report concludes that its data “implies that only a select few wealthy households can afford to own such properties.” National Bank’s report notes that the qualifying annual income to own a house in Vancouver is $126,000. Meanwhile, Vancouver’s median income is $63,000.
The picture is markedly better in the condo market. As National Bank notes, the qualifying income required for an average-priced condo is $67,000. But even affordability there is slowly eroding, as the RBC report also notes: “purchasing a condo apartment is the only realistic option for most first-time buyers—although this too has become slightly less affordable in the last two quarters.” Overall, home resales were up 28 per cent in 2015 over 2014, as 43,000 units changed hands. The average sale price jumped 11 per cent year over year. And don’t expect affordability to fade from the agenda: “affordability-related pressures are unlikely to subside anytime soon.”
Milennial expectations Cue your outrage: Vancity has a survey on what millennials expect to inherit, and the answers are wince worthy. It finds that 39 per cent of ‘millennials’—Metro Vancouverites aged 18 to 34—expect to receive an inheritance of more than $300,000, while only 12 per cent of seniors expect to pass on that amount. And it’s not that they’re lacking generosity: 60 per cent of respondents said that they had left a portion of their wealth to help with a down payment of a house or car, or pay off student loans.
Here are a few more highlights:
• The median asset value of B.C. households 65 years and older is about $594,400 • The average inheritance in B.C. in 2012 was $137,800, while the median was a mere $50,200• 85 per cent of male children and 71 per cent of female children aged 18 to 34 expect to receive an inheritance • 66 per cent of B.C. parents expect to leave $100,000 or less to each child • 78 per cent of B.C. parents aged 65 or older have drafted a will
The numbers come from a poll of 800 British Columbians conducted by Insights West in late January.
Site C protestsA small group of protestors has until midnight Monday to vacate their encampment in the future watershed of BC Hydro’s mammoth Site C dam project. The order comes via an injunction granted by a B.C. Supreme Court judge to BC Hydro ruling that the project is in the public interest. The decision is a victory for BC Hydro, which argued that the protestors could bring about costly delays to the $8.8 billion project.