Future of economy threatened by expensive real estate
David Carrigg
Province
Vancouver has one of the most unaffordable housing markets in the world, according to a new international report.
Wendell Cox, co-author of the Demographia International Housing Affordability Survey, says Vancouver ranked as the 15th most unaffordable housing market in Canada, Australia, New Zealand, the United Kingdom and the U.S.
Los Angeles topped the list, followed by San Francisco and Honolulu.
The survey also listed the top 20 affordable cities for housing, with Winnipeg coming in fourth behind Buffalo, Rochester and Indianapolis.
Cox warns that in Vancouver and other unaffordable cities, “unprecedented house-price escalation has occurred relative to incomes.”
He says that in the recent past, all cities were considered to have affordable real estate based on the city’s average home price and average household income.
Vancouver now falls into the category of “severely unaffordable.”
“This is a matter for concern,” Cox says. “Home ownership has played an important role in democratizing prosperity in a nation and is a pillar of a sustainable affluent society.
“Those benefits are threatened by the high housing prices that are likely to reduce home ownership and household wealth-creating capacity. A nation with more renters is likely to be less prosperous and less cohesive.”
Cox is critical of business writers who claim high house prices reflect a strong economy.
“Housing prices that escalate to the point that millions of households are denied home ownership is anything but good news for the future of an economy,” he says.
“Many analysts, and much of the business press, have followed the unprecedented housing-cost price escalation with seeming glee — while ignoring the reality that household incomes have not been inflating at a corresponding rate.”
© The Vancouver Province 2006