A whiles back I was listening to the radio, the beat 94.5 I believe and I caught a portion of the news they were talking about. Apparently Vancouver BC is now the single most expensive place to live. Even out doing New York. The only question is….WHY? Granted Vancouver is probably the most desirable province to live in out of Canada the demand does not seem to match the supply.

According to a recent study surverys peoples income vs the average cost of housing, Vancouver managed to earn a rating of 9.3. Simply put the average house cost 9.3 times the average salary of a person in Vancouver. To put this into perspective the average stand alone home in Vancover is roughly 600,000 dollars. By taking this rating of 9.3 that means the average person makes around 70k a year. Now remember this is an average some some people make way more and some people make way less.

The thing that blows my mind is even if you do make 70k a year in order to have any type of mortgage that one would consider affordable you would have to place a down payment of more than 25%. Lets work this out a bit further 25% of 600,000 is 150,000 leaving you a mortgage of roughly 450,000. That means that the average person would have to work just over 2 years and save every dime they earn in order to make that down payment. Oh wait….we forgot to factor in the tax man! And what about even getting qualified for a mortgage.

For a minute lets throw all the numbers out the window and just think pure economics. In its most simplistic form this works down to demand and supply. With all the new developments that has happend and with a population of roughly 2 million in the lower mainland it seems to baffle me…who is buying all the housing?

Currently we are seeing a growing trend of Asian buyers from mainland China coming in and snatching up housing like a fat kid at a bake sale. Or perhaps retired folks that are looking for more comfortable weather. Whatever it is its not good news for locals or their families that look to be driven out by greedy developers.

Only time will tell what happens in this scenario…lets just hope that it plays out for the best.

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