If you’re a young couple looking to buy a home in Metro Vancouver, may I suggest Regina?
The average price of a home in Regina is a shade over $303,000, which is pretty affordable, especially when you compare it to anything in Metro Vancouver.
Of course, the commute is a killer – 17 hours and 51 minutes (1,723.3 km) via the Trans-Canada Highway, although with all the money you save by living in Regina, you could afford to fly in. Air Canada has a nice flight that leaves the Queen City at 6 a.m. and gets into YVR at 7:15. Only $473 – round trip!
That’s absurd, right, but it’s no more absurd than the situation in Vancouver, an absurdity underscored by a recent report from millennial advocacy group Generation Squeeze, called Straddling the Gap – a troubling portrait of home prices, earnings and affordability for younger Canadians. It features an analysis of the gap between Metro Vancouver housing prices and what the aforementioned young couple can afford.
I bring this up only to temper any rising enthusiasm driven by recent news that we’re in a “buyer’s market.” For Bill Gates maybe it’s a buyer’s market. For the rest of us, it’s still the second least affordable place on earth.
It looks something like this, according to Straddling the Gap:
The average home price would have to fall $795,000 (about three-quarters of current value) for a young person between 25 and 34 to carry an 80 per cent mortgage at current rates.
At that rate, it would take 29 years in a full-time job to save up the 20 per cent required for a down payment. That’s 23 years longer than it took the previous generation.
Regina’s looking better by the moment.
If you’d like to get a little closer to downtown Vancouver, you could try Kelowna, where average home prices would have to fall $239,000 before our homeless young couple could afford to buy in.
Kelowna’s just a hop, skip and a jump from downtown … a mere four hours and four minutes via the Okanagan Connector, Coquihalla and the Trans-Canada. Heck, there are days it takes that long to get across the Lions Gate Bridge.
So curb your enthusiasm. Buyer’s market? Please.
So what? What are the consequences of shutting an entire generation out of home ownership? And it’s not just ownership. The Metro Vancouver vacancy rate for rental housing has been less than one per cent forever, and the current average rent for a two-bedroom apartment is $3,200. That’s per month, not per year.
Back to the consequences question. The answer is, I think, devastating. If you have equity in a property, it’s natural to care about the community that surrounds that property. If there’s no equity, there’s less commitment. Human nature.
And if you’re forced to live in some place because it’s the only place you could afford, it’s likely your bags will stay packed until you can jump to a more expansive/expensive lily pad.
So we have an entire generation that continues to live in its parents’ basement waiting for conditions to improve. If Generation Squeeze is any indication, that will be when Hell freezes over.
I wonder what it costs to live in Hell? I guess I’ll find out soon enough.
Meanwhile, nobody seems to be in a big hurry to come up with a solution. Politicians campaign on affordable housing platforms, but Generation Squeeze makes it clear that the foundation of those pledges is more than a little unsteady.
The District of North Vancouver, for example, has inexplicably gone into hibernation. Instead of ramping up the effort to build social housing, district council has decided to establish an affordable housing task force to study unaffordable housing further. Memo to council: You are a few easy clicks away from reading Straddling the Gap. Here’s the link, knock yourselves out: gensqueeze.ca/straddling_the_gap.
Of course, things aren’t any better in West Vancouver, where if you have to ask, you can’t afford it.
Only the City of North Vancouver seems to be interested in housing people, and it’s hemmed on all sides by the Shire, er, the District, so its influence is circumscribed.
Meanwhile, young people seem oddly resigned to their fate. In a place where everyone protests everything all the time, where are the housing protests? It’s as if people feel too guilty or sheepish to be marching about the lack of affordable housing, like it’s a First World problem, or a personal failing, like dandruff.
But it’s not. And all of the attempts to slow down the market have just made it less affordable for buyers and renters alike. It’s time to get serious about the squeeze and come up with ways to welcome the new generation of adults into the community.
Otherwise, “Howdy neighbour” will only elicit a dull, empty echo.