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EDITORIAL: Elephant in the room
Run out of things to talk about? Real estate, and the price of obtaining a home, is always a surefire conversation starter. Especially in Metro Vancouver, where housing prices rank amongst some of the highest in the world.
And with the prospect of interest rates going higher in the near future, home ownership is only going to get more expensive.
For many, it’s already a pipe dream.
The Royal Bank’s housing affordability index, released every spring, says the cost of owning a detached bungalow in Metro Vancouver already chews up more than 80 per cent of a household’s pre-tax income. That includes mortgage payments, utilities and property taxes.
That doesn’t leave much left over for necessities like food and clothing, let alone life’s occasional indulgences such as a vacation or a night out at the movies.
Single family homes in neighbourhoods like New Westminster’s Queen’s Park or Buckingham and Kensington in Burnaby, already average more than $1 million.
Even condos are becoming beyond the reach of many aspiring to own their home. To keep price points down, developers build smaller and smaller units, some barely bigger than a living room in a full-sized house. New rules introduced by the federal government in 2012 were meant to temper red-hot real estate markets by making it tougher for first-time buyers to qualify for a mortgage and less likely to get in over their heads. But their effect has largely worn off. Witness the cranes dotting the skylines of Burnaby and New Westminster, and the lineups when the sales centres for new projects open.
The market for real estate in Metro Vancouver seems insatiable. Whether we can afford it to be that way should be the real topic of conversation.