Vancouver’s housing crisis: No, not like before, and not like anywhere else (except Hong Kong)Try discussing Vancouver’s affordability crisis with enough baby boomers and you’ll probably encounter two corrosive falsehoods. The first states that Vancouver might be unaffordable, but it’s been like this before. The second states that even if Vancouver has become particularly unaffordable recently, other “world- class” cities are being hit to the same degree everywhere, and Vancouverites should get used to it, because it’s the new normal. For full effect, these sage observations are best delivered with a worldly sigh. Maybe a kindly pat on the head.
The subtext is that Vancouver’s pampered millennials should stop whining about the fact that their city’s real estate is now the second- least affordable in the world, according to Demographia’s* study of 3. Sometimes it’s not even the subtext. Sometimes it’s the actual text. The problem is that both positions betray a disregard for facts that is either woefully ignorant or wilfully self- serving. Not like before. The “always been like this” myth is easily dispelled by checking the rapid escalation of Vancouver’s unaffordability ratio, a measure of median home prices as a multiple of median household income.
Changrong Zhu, Peihua Yang, Dongliang Chao, Wenjie Mai, Hong Jin Fan*, Heterogeneous Nanostructures for Sodium Ion Batteries and Supercapacitors, ChemNanoMater 1, 458–476 (2015) .
A list of the various horse riding schools in Hong Kong and their contact details.
Hong Kong Engagement Photos. An engagement session for Candy + Kenny in Hong Kong captured by our fabulous friends at Simply Bloom Photography!
Vancouver’s multiple (including all residential sales in greater Vancouver) is now 1. That’s the highest it’s ever been, double the 5. Demographia goes. But let’s go back further. A quick look at adjusted home prices since the 1. Vancouver is now deeply, disastrously, into uncharted territory.
Vancouver has only experienced two major price spikes in the past 4. In adjusted- dollar terms, prices were about the same in both those years and in 2.
In adjusted terms, median household incomes were C$6. C$5. 2,0. 00 in 1. C$5. 7,0. 00 in 2. In other words, using 2. It was 7. 6 per cent lower in 1. It might be rough maths, but it’s extremely instructive. We produce estimates of 4.
Unaffordability has soared since 2. It’s 1. 0. 6 now, remember? So comparing the current situation with even the darkest days of 1. Things are now far, far worse, regardless of what unsympathetic boomers might conjure from their foggy memory banks.(This refers only to price : income; I make no judgement about the catastrophic impact of 2. Not like everywhere else. As for the second myth, that the current spike in unaffordability is similarly transforming other hedge cities – think New York, Sydney, London, San Francisco - well, that’s rubbish too, at least in terms of Vancouver’s recent scale.
As we have seen, unaffordability is up 1. Vancouver since 2. In Sydney, it’s only up 1. In San Francisco, it’s up 1. New York’s unaffordability has actually decreased 1.
London’s multiple is only up by 2 per cent (compared to 2. If we look at the top ten most unaffordable major metropolitan cities in the world in the Demographia study (setting aside Hong Kong for a moment), nothing comes close to Vancouver’s 1. Auckland in New Zealand comes nearest, with a 3. The situation ought to be clear to any reasonable person, boomer or millennial: Vancouver’s real estate market is now a world- class freak show. There is only one other major city that has experienced a concurrent unaffordability hike comparable to Vancouver’s. And it’s not just comparable – it’s virtually identical.
That city is Hong Kong. Hong Kong’s unaffordability multiple is up 4. Demographia stats. But data by Thomson Reuters reveals that Hong Kong’s unaffordability multiple since 2. It’s true that other cities may have experienced similar spikes in unaffordability - but at different times. Pointing these out misses the point, which is to try to establish commonality by finding similar situations at similar times. So what makes the last decade so unusual for both Vancouver and Hong Kong - and only Vancouver and Hong Kong?
Is it mere coincidence? It’s an excellent question for anyone who discounts the impact of Chinese wealth: from 2. Vancouver attracted about 4. A large majority were from China. In Hong Kong, few doubt the recent role of Chinese money in the real estate market; in 2. Chinese buyers had soared to the extent that they accounted for 4.
Centaline agency. In late 2. 01. 2, the Hong Kong government responded by imposing a hefty 1. Chinese). That cooled things, but Chinese luxury buying is back on the rise, and in 2. Of course, factors other than Chinese wealth flows are probably at play in Vancouver.
But have any had a similarly isolated impact on Hong Kong, Vancouver’s unaffordability doppelganger? All story ideas and comments are welcome. Connect with me by email ian. Twitter, @ianjamesyoung.