It is easy to comprehend why people are moving up in the housing continuum and freeing up the real nature of rental homes. But the main question is – is it economically viable to shift the paradigm over to detached homes and condos? Let’s figure it out!
For a long time now, Vancouver’s real estate market showcases a high degree of vulnerability. Certain reports continue to signal strong evidence of staunch overvaluation as housing prices are still going north of expectations. Surveys noted that homeowners in Greater Vancouver and the Greater Toronto Area remain probably the most highly indebted in Canada, due to the speed in which their real estate market has expanded. Other measures designed to either cool down the housing market include Bank of Canada, raising key interest rates, Ontario’s Fair Housing Plan and a new mortgage stress test by Ottawa for insured mortgages. Unguaranteed mortgages remain slightly more expensive.
Condos Outpacing Detached Homes
We have found moderate evidence of price acceleration when it comes to the overall market, but it has been pointed out that low price acceleration among detached homes was causing an extremely high price growth influx among condos and townhomes. Instead of buying detached homes, families are now settling for the option of apartments and condos. The irony is that condos aren’t exactly on the cheaper side!
Renters Suffering The Biggest Blow
Renters are struggling to find homes because prices are skyrocketing and at the same time availability is rapidly declining. Vancouver’s housing market continues to overheat, as demand for multi-family units remains elevated, largely due to their relative easy affordability as compared to single-detached homes. As a result, inventories of both new and resale multi-family units are at or near all time lows. People believe that the Canadian government at one point in time was able to construct enough rental buildings annually, but after the arrival of private sector, it hasn’t been able to fulfil the rising requirements of the growing population. In turn, there has been a shortage of quality apartments and condos in Vancouver, and this has led to an enormous rise in housing rent.
So is it viable for the common people to start renting condos and apartments at over $1500 a month? No! In fact, it would be very troubling for average middle income families to invest that much money in rent alone. It was reported that last year, Canadians nearly spent more than 30% of their incomes on shelter costs, which is way beyond the line of affordability. All in all, it is becoming very difficult for families to survive, not to mention, save money with these rising costs.
The need of the hour is direct intervention from the government to help reduce proliferating housing costs.