A new international survey shows that Vancouver continues to be the least affordable city to buy a home in Canada – and ranks third internationally. But would you believe that Victoria comes in at second on the list in Canada, less affordable than all of the other major markets considered in the study?
What is affordable?
The annual ranking, compiled by Demographia, considers affordability based on a “median multiple”. The median is the middle point in a set of numbers – there are just as many values both above and below it. In this case, the median multiple is calculated by dividing the median house price by the median household income. Essentially, the number that results tells you how many times greater the cost of a house is than the household income.
The survey regards a median multiple of 3 or less to be affordable. Victoria’s median multiple is 8.1. For comparison, Vancouver’s value is 11.8 and the country’s other hot realty market in Toronto comes in at 7.7.
Causes of unaffordable homes
The introduction to the Demographia survey links housing affordability to supply: when the supply increases, the number of affordable homes rise. We know that in Victoria we are seeing very low inventory in the market; the number of active MLS property listings in December 2016 was lower than the previous year, while the number of sales was higher. The Victoria Real Estate Board believes that this trend will continue in 2017.
Contrary to expectations, Victoria hasn’t yet seen a large shift of additional foreign buyers; however, that data has only been collected for a few months and it’s not yet known how much – if any – foreign home ownership has been driven by the Vancouver tax. Of greater impact may be the trend of new residents from the lower mainland moving to the island and purchasing their retirement homes.
How will I ever afford a home in this market?
It might seem like you will be stuck renting in Victoria for a long time, but if your dream is to own a home it’s still possible. If you’re curious as to the “dollars & cents” difference between renting vs buying in the long run, check out our online calculator.
One common challenge is saving enough for a down payment. Our mortgage planners are up-to-date on the many options available – including the new BC HOME Partnership loan – and can help you find the best solution for your situation.
If you have had credit issues in the past that you feel are holding you back from getting a mortgage, you might be interested in our Rent No More in 24 program.
If you’re ready to start on the path to owning your home, contact Auxilium Mortgage today for a free consultation with one of our brokers: call Toll-Free 1-855-590-6520 or visit us at 307 Goldstream Avenue during regular business hours, Monday through Friday 8:30 a.m. – 5:00 p.m. We can also arrange an appointment evenings or weekends to work with you.
Auxilium Mortgage Corporation is based in Victoria, BC and works with clients locally and across Canada. The Auxilium team has over 100 years of combined financial experience and access to dozens of lenders to help you meet your goals.
