Home prices will increasingly soar beyond what is affordable to most families – not just in Vancouver itself, but in other Lower Mainland cities as well.
That’s the outlook in a new report from Vancity Savings that projects the average home price in Vancouver will exceed $2.1 million by 2030 and require more than 100 per cent of average household income to pay the mortgage.
In 15 years time, Langley will be only community in Metro Vancouver with affordable real estate, according to the report, titled Downsizing the Canadian Dream: Homeownership Realities for Millennials and Beyond.
Besides Langley City, only Maple Ridge, New Westminster, Pitt Meadows and Port Coquitlam can currently be called affordable, the report says, with the mortgage payments for the average home consuming just under 32 per cent of household income – CMHC’s recommended limit.
“However, if current trends continue, even this will not last,” the report said. “Unaffordability will steadily radiate outwards.”
Burnaby, Richmond and White Rock had house debt service ratios of around 30 per cent in the early 2000s, it says, but that hit 46 per cent in 2014 and is projected to rise to between 60 and 70 per cent in 2030.
Surrey’s ratio is projected to climb from 39 to 48 per cent and Langley Township’s would rise from 35 to 43 per cent.
By 2030, payments for a typical North Vancouver home will consume 100 per cent of income, compared to 73 per cent now, and the average Vancouver home will hit 108 per cent, up from 76 per cent.
“In 15 years, the average household will be resolutely priced out of the urban market,” it says.
Factors driving the change are increasing population growth and the region’s constrained geography, Vancity says.
“The resulting scenario will see single detached homes become a scarce luxury,” it says.
While detached house affordability climbs out of reach, condos will be increasingly in fashion.
Vancouver condos should rise in price from an average of $407,500 now to $810,500 in 2030, the report says.
Condos will be unaffordable in Vancouver by 2018 and in Burnaby by 2023, it projects.
“However the good news is that condos in all other communities will remain largely affordable,” it says, estimating 2030 debt-service ratios for condos at as little as 14 per cent in Surrey and 20 to 30 per cent in Coquitlam, Port Moody, New Westminster and Richmond.