Tuesday, September 29, 2009

Greater Vancouver House Prices and Local Incomes

Click on the image above to enlarge.

This is a nice chart put together by the Vancouver Condo Info blog.

Using data from the BC Provincial Government website of BC Stats, our intrepid blogger has put together a graph which compares the increase in local incomes to the run-up in house prices from 2000 to 2007 (which is the last available year of local income statistics from Revenue Canada).

The house price data comes from the house sales data at BC Stats too.

House prices are dramatically outpacing increases in income.

Which brings us to the eternal evaluation of housing prices - regardless of your geographic location: There may be other considerations, but financially speaking, if home prices are out of line with rental prices, wages and wage growth, and jobs, then you are in a dangerous bubble.

And in the Lower Mainland the rental prices for homes are far lower than current mortgage payments while wages and wage growth haven't kept pace with the dramatic rise in prices.

How can anyone possibly think this trend will continue indefinitely and that housing prices will keep going up, up, up?


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