Does it take 71% of household
income to buy a bungalow?
It's big news. By now, you may have read the headlines or seen the news stories reporting that it takes a whopping 71% per cent of household income to buy a bungalow in Vancouver.
Is this true?
To find out, we asked an expert, Cameron Muir, the Chief Economist at the BC Real Estate Association.
What's the real story?
Muir told us if you're a first-time home buyer and you are earn an average household income (about $63,300) and you want to buy a detached bungalow in Vancouver, it will indeed take a significant portion of your income.
But most first-time buyers are typically looking to buy a more affordable home.
Muir points to real estate industry data. "About 60 per cent of home sales are multi-family and almost 80 per cent of new home construction is multifamily, as well," says Muir.
Muir explains that first-time buyers are more likely to buy an apartment condominium which requires about 35 per cent of the average household income and even less if you account for the typical discounts lenders offer from the posted mortgage rate.
"This is still an amount affordable to those with a median household income, says Muir. "And remember, although affordability is low, there are still many condominiums within the Greater Vancouver area that are priced below what a household with a median income can afford."
Muir also explains that anyone buying a standard two-story home will likely have significant equity to put into the home, and will be earning more than the average income.
That's the real story and it's good news! So what income do you need?
Here is a sample chart showing you the numbers based on a 25 per cent down payment, amortized over 25 years:
| Property type |
Benchmark Price |
Annual income required |
| Apartment |
(As of Aug. 31, 2007) |
|
| Burnaby |
$325,359 |
$69,213.32 |
| Coquitlam |
$280,636 |
$59,699.44 |
| Maple Ridge & Pitt Meadows |
$280,636 |
$53,839.39 |
| New Westminster |
$253,089 |
$61,736.32 |
| North Vancouver |
$290,211 |
$79,633.00 |
| Port Coquitlam |
$374,340 |
$52,611.52 |
| Port Moody |
$247,317 |
$62,561.71 |
| Richmond |
$303,897 |
$64,647.73 |
| Vancouver East |
$308,530 |
$65,633.30 |
"Benchmark" represents a typical property within each market
Source: Real Estate Board of Greater Vancouver
Contact us, we'd love to hear from you!
For more information on this article or how we can help you with your real estate needs, contact your Royal Pacific REALTOR® at 604-266-8989 or use our online form for 24/7 service Contact us |
 |
Did you know? |
 |
Expert Quotes |
|
|
Previous page 
Top of page 
Site Map