All data is from the 2006 census from Statistics Canada.
The total number of households in Vancouver Census Metropolitan Area: 817,225
Total owners: 531,725
Total renters: 285,045
Change since 2001:
Households: +7.7%
Owners: +14.9%
Renters: -3.6%
Not surprisingly the number of owners rose in the 4 years between 2001 and 2006 but I didn't thiink it would be double the rate of population increase. Surprisingly, the count of people renting fell between 2001 and 2006 even though the population increased.
Percentage of households owning: 65.1%
Percentage of households renting: 34.9%
Number of households spending more than 30% of income on shelter: 265,870
Renters spending more than 30% of income on shelter: 123,050
Owners spending more than 30% of income on shelter: 142,815
Those numbers of people spending more than 30% of household income on shelter costs are just sickening. I had no idea there were so many people in that kind of dire financial position. We are talking about 1/4 of the entire population of the greater vancouver area. I suppose that single people who make average incomes or lower would comprise the majority of those spending 30% or more in addition to the overextended home debtor.
11 comments:
For your slow readers, can you please highlight what's interesting?
Most obviously, the big shift away from renting to owning.
Tomorrow's demand today (or should I say yesterday).
43% of renters paying too much for housing.
26% of owners paying too much for housing.
Not what I expected at all!
"Not what I expected at all"
I ran some numbers from the census data tables and came up with these stats:
%owners paying 30%+ income:
2001 24.0%
2006 27.1% (+32K absolute change)
%renters paying 30%+ income:
2001 43.2%
2006 43.8% (-3K absolute change)
The pool of rental properties decreased by 10K which is why there was -3K change in the number above.
Conclusion: more properties are being owner-occupied and these owners are paying more of their incomes to do it. Add to this improving affordability with "innovative" financing options. Ouch.
43% of renters paying too much for housing.
26% of owners paying too much for housing.
Not what I expected at all!
Once again, the poster is forgetting that the average homeowner purchased decades ago.
Renters are disproportionately poor (i.e. their incomes are skewed toward the low end) and that's why they spend a higher % of their income on shelter. And other necessities such as food.
No -- what is interesting is that population (households) went up less than 8% 01 - 07 while prices went up 108%. And there is no bubble, right... ;-)
Following through on Octagonian's post, since the number of households went up by about 58,000 over 5 years, that means that there were about 11,600 households formed per year.
From Mohican's chart of starts, completions, and under construction, we've had more than that many annual completions since mid-2002. Right now, we're running at about 1.5x that many completions annually.
...So there's been considerably more construction than necessary to handle the rate of household formation from 2001-2006.
Speculating, the completions in 2001 and early '02 may not have been quite enough to satisfy the demand from household formation, which may have been what initiated the rising prices...
...However, assuming the rate of household formation holds steady, right now there's enough units under construction to satisfy more than two years' worth of household formation. Crazy? That's what I'd say!
...To me, Mohican's chart plus this rate of household formation implies roughly 20,000 excess units already completed in the last ~4 years (considering the deficit from Mar '00 to Mar '02 and the surplus since), and almost as many surplus housing units under construction. How many years of household formation will be covered even if zero housing units are started in the next couple of years? It'll be quite a hangover for the industry!
...And remember, there's nothing that says that a household can't cease to exist-- that's what happened to me-- my wife and I moved in with family, so two households have now combined into one!
Poor and single renters really have it rough. The Stats Can study mentions over half of single people rent. So a single person working in a service sector job (maybe earning $1500/month after taxes) is going to have hard time spending less than half their income on rent and utilities.
Also the study doesn't include repairs, maintenance, or assessments for owners.
I agree that we are obviously looking at a huge increase in available housing, but we are also constantly told how low vacancy rates are. What do you think is a "normal" level of vacancy and how many units are we away from that?
2% vacancy rate indicates 5000 rental units (assuming it only counts rentals). We are close to zero now, so that's a large number of new units needed just to bring things back in balance. Despite the data to the contrary, I think renters are seeing significant prices increases (inflation +5%). Hopefully relief is coming for everyone in the form of new units and market forces.
"Hopefully relief is coming for everyone in the form of new units and market forces."
People will do what is always done in a low vacancy environment: densify -- find a roommate and occupy all those unused rooms in the near suburbs.
With historically high rates of new dwelling supply coming online in the next 1-2 years and jobs shifting away from the Lower Mainland as the Olympic projects wrap up there is no good reason for low vacancies with high rent increases to continue for much longer.
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