BY JOANNE LEE-YOUNG
In his latest snapshot of housing unaffordability, researcher Andy Yan shows the percentage of Metro Vancouver homes valued over $1 million rose from 28 per cent to 43 per cent in 2016.
Marked in red are homes over $1 million for 2016 and 2015.
For the past five years, Yan’s so-called “million dollar line” looking at home values based on data from B.C. Assessment has been a visual way to capture the geographical divide in housing prices.
At first, the symbolic measure sat around Main Street between Vancouver’s west and east sides before drifting eastward beyond Fraser Street. Last year, for the first time, it fanned out as Yan accessed data to include rising prices for homes across Metro Vancouver.
For 2016, which is based on assessments at July 2015, Richmond, Burnaby, Vancouver, North Vancouver and West Vancouver all had over 60 per cent of homes worth 1 million or more — with West Vancouver at the highest with 97 per cent.
Said Yan: “I’m guessing this rise is probably not due to increases in local wages and incomes. I think it’s likely a convergence and combination of constrained supply for single family detached housing, low interest loans, property speculation, and global capital with a sprinkle of trying to secure adequate family-oriented housing for many households with children.”
There doesn’t seem to be an abating of this trend in close sight despite softening real estate prices for some parts and categories of Metro Vancouver in 2016.
B.C. Assessment has warned that single detached homes in Metro Vancouver will be assessed 30 to 50 per cent higher for 2017 taxes than in 2016. It said that these properties went up the most in Vancouver, Surrey, Richmond, Burnaby, the North Shore, Squamish and in the Tri-Cities from July 1, 2015 to July 1, 2016, which is the date on which yearly assessments for 2017 taxes are set.
Yan, who is director at Simon Fraser University’s City Program, also looked at the impact of transportation costs on housing affordability.
In the City of Vancouver the average cost of transportation over 25 years — assuming two per cent inflation per year and that nothing changes to improve the current situation — works out to be $298,459, according to Yan.
By comparison, if you live in the Township of Langley, the 25-year cost of transportation would be $563,755.
Across the Metro Vancouver region, if you add in amortized 25 year average annual transportation cost estimates, the percentage of homes with a cost of over $1 million rises significantly from 43 per cent to 92 per cent.
In areas such as Vancouver, the North Shore, Burnaby and Richmond, adding in such transportation costs increases the percentage of home values, but it’s in Coquitlam, New Westminster, Surrey, Delta, Port Coquitlam and the township and city of Langley where the contrast is most pronounced. In Coquitlam, the percentage of home valued over $1 million goes from 22.4 per cent to 97 per cent if you account for estimated amortized transportation costs. In the township of Langley, the percentage rises from 4.8 per cent to 90 per cent.
“This is only looking at the (straight) cost of transportation, not even the time,” said Yan.
He continued: “There is ‘phantom affordability’ too, if you will. This idea that you can drive (further from the city) until you qualify (to buy a home) doesn’t take into consideration that as home mortgages (cost less) transportation mortgages (in some areas) go up.”
Yan said this is precisely the direction seen in some U.S. cities, where the areas hardest hit by affordability woes have been the outskirts and suburbs rather than the city centres even when they have seen some of the highest home prices.