Monday, July 26, 2010

Metro Vancouver Rental and Ownership Data

A great summary of the ownership, rental, and affordability state of the union for Metro Vancouver can be found over at metrovancouver.org.


In the latter link there is a presentation entitled Metro Vancouver Housing Data Book (PDF) that contains some wonderful demographic and affordability data that make authors of a housing analysis blog drool. A few key points made in this presentation:

  • The median owner income of $69,318 is equal to approximately 125% of the median household income for the region.
  • Based on the median income of $69,318, an “affordable housing cost” is equal to $1,733 per month using the standard that housing should not cost more than 30% of a household's gross annual income.
  • In 2006, there were 817,230 households in Metro Vancouver; 531,725 (65%) were owners and 285,045 (35%) were renters.
  • 21% (59,275) of renter households had annual incomes above $45,000. This fits the general definition of moderate and above income (above 80% of the regional median income). Of these households, 11% (31,220) had incomes between $70,000-$100,000, and 7% (19,975) had incomes above $100,000.
  • Region wide, 39% (314,780) of all households had an annual income of $70,000 or above, of which 84% (262,035) were home owners and 16% (51,195) were renters. 20% (106,030) of owner households had annual incomes between $70,000-$100,000, and 29% (156,000) had incomes above $100,000.
  • Of the 285,045 renter households in 2006, approximately 37% were accommodated in the 104,952 purpose-built apartment rental units counted by CMHC. The remaining rental stock is predominately non-market rentals, private condominium rentals, and rented single detached and other ground-oriented units
  • The Statistics Canada Censuses shows that between 1991 and 2006 the total number of households increased from 609,380 to 817,035. For this period, as a percentage of the total housing inventory, apartment households increased from 34% (208,225) to 40% (321,970), while single detached households declined from 50% (302,120) to 35% (288,320).
  • Data reported from CMHC shows that for Metro Vancouver for the period from 1999 to 2008 (10 years), average apartment rents increased from $725 to $937, an increase of 31% or 2.7% per year.
  • During this same 10 year period for Metro Vancouver, according to the BC Stats Consumer Price Index, general prices increased by 20% or 1.8% per year on average.
  • During this same 10 year period for British Columbia, according to BC Stats, average wages increased by 24% or 2.2% per year on average.
  • Overall for the period, the average wage increase was greater than the general price increase, but lower than the average apartment rent increase.
  • Metro Vancouver estimates that there are 69,200 - 75,500 secondary suites in the region. This represents approximately 22% to 24% of the total rental households (318,000) in 2009. [jesse: note the secondary suite accounting is all over the map. It is in many ways the proverbial "dark matter" of the city's housing market.]
  • The average rent for a one bedroom secondary suite was $730, 20% ($189) less than the average rent in a conventional apartment building. The average rent for a two bedroom secondary suite was $862, 26% ($307) less than the average rent in a conventional apartment building.
There are much more data in the presentation. Well worth a read if you're trying to wrap your head around Metro Vancouver's housing market.

16 comments:

JimTan said...

Right!

Here's an interesting number. In 1991, the Metro Vancouver average income was only 20.5% above the median income. BY 2006, it had risen to 32.8% above median income.

Who's buying RE? Is it the top half or bottom half?

jesse said...

There is little doubt the income spread between rich and poor has increased in the past 20 years. Even still, there are only about 180,000 households with incomes above $100,000, the vast majority of these households owning.

In addition, the percentage of households renting fell from 43% in 1991 to 35% in 2006. If it is true that households with higher incomes have been able and willing to become owners in ever greater proportions, there is significant pressure on the remaining rental stock's income sources.

The study didn't show income growth by tenure but that would certainly be interesting.

JimTan said...

"In addition, the percentage of households renting fell from 43% in 1991 to 35% in 2006. If it is true that households with higher incomes have been able and willing to become owners in ever greater proportions, there is significant pressure on the remaining rental stock's income sources."

Actually, renter households grew from 259k in 1991 to 283k in 2006. Up 9.3%, Vacancy rate range 2.8% to 0.8% during those years.

Deliverator said...
This comment has been removed by the author.
Deliverator said...

# Data reported from CMHC shows that for Metro Vancouver for the period from 1999 to 2008 (10 years), average apartment rents increased from $725 to $937, an increase of 31% or 2.7% per year.

# During this same 10 year period for Metro Vancouver, according to the BC Stats Consumer Price Index, general prices increased by 20% or 1.8% per year on average.


Price increases over that 10 year period appear to be grossly understated. It's pretty clear to anybody who has looked to buy an apartment or house that prices have easily doubled since 2005.

vibe said...

The price index refers to the CPI, basically inflation. I'm not sure house prices have quite doubled since 2005 but they have certainly outstripped the rate of inflation.

vibe said...

Jim, are you implying that your comment contradicts Jesse's? The population was growing at the same time, as I'm sure you are aware.

It should be quite clear that in order for the home ownership rate to increase as much as it did it was lower income families that were buying. Just because you put some numbers in your posts don't think they look any more rational.

Arwen said...

Oh, this is wonderful info. I have been trying to figure out the median wage in the rental market - I've been arguing skew on common sense, and it's a hard sell - there's not a lot of common sense out there right now. If 79% renters make below $45,000, that's good to know!

tanuki86 said...

This is an interesting report. Note that it does use census data in order to draw some conclusions. I suggest that everyone write their MP to ensure that the long form census is reinstated in order to be assured of accurate data for future housing forecasts.

I mean, what else are we going to do, rely on CMHC data? Look at where they have taken the housing market.

jesse said...

@tanuki86 yes I am always a proponent of having more, not less, accurate data to use. I am not certain this report used much from the long form census, as it only used simple measures income and occupancy.

On this front I think Statscan has some gains to make in terms of dwelling counts. The last section on the report shows how inaccurate the dwelling count is for legal, illegal, and semi-legal suites in the metro area.

The report goes as far to state these suites are a big part why Vancouver remains affordable, for those who don't mind renting that is. Basement suites and their massive impact on dwelling stock are the dirty secret no local government wants to acknowledge. That said, Surrey council just advanced one step on the 12 step program earlier this week.

mohican said...

Based on this data I would cautious about investing in real estate for the following reasons:

1) Income level of renters / prospective tenants and thus their ability to pay and potentially quality of tenant is lower and has been declining.

2) There is a much smaller pool of buyers (greater fools) with incomes high enough to qualify for a mortgage to eventually purchase said investment property. This is evidenced by the dramatic rise in the ownership rate and the low percentage of renters with high incomes.

JimTan said...

Don't worry! There's 30k international immigrants coming to the city every year. Some of whom bring cash with them.

Anyway, don't worry about affordability. Rennie dropped some hints last year. He said that developers will have to do it differently in the future. Goodbye to marble countertops. Hello to 600sf two-bedroom apartments.

Population set to explode
Richmond will need another 26,000 suites, report says
By Alan Campbell, Richmond News July 23, 2010

Richmond's population is set to spiral in the next 30 years by almost 50 per cent to 280,000.

And the city will need to have another 26,000 apartments -- a rise of 120 per cent -- if it wants to accommodate the people explosion by the year 2041.

The two forecasts were among a plethora of trend-based predictions made by consultants Urban Futures, who were hired by the City of Richmond to help with the 2041 OCP Update.

The study is part of a long-term process to enable the city to plan ahead of time with the infrastructure and facilities it will need to cope with an expanding populous.

Another highlight from the report, which was presented to city council's planning committee this week, included Richmond employing almost 180,000 people by 2041 (an increase of 33 per cent).

The forecasts were even broken down to specific neighbourhoods, with the city centre set to more than double its population to top the 100,000 mark.

To cope with such massive growth, the city centre's complement of 15,000 apartments will have to multiply by 139 per cent to 35,000 units.

z North Richmond is next on the list of expanding populations, with an expected 40 per cent rise by 2041 to around 30,000.

z East Richmond will have to prepare for a 37 per cent increase in population, coupled with a 23 per cent rise in employment.

z Steveston will enjoy a more modest 10 per cent rise in population, but a 27 per cent rise in employment to 5,400 and a 62 per cent spike in the number of apartments.....

Shawn said...

It only goes to show that their housing market this year is booming. Well, from what I've noticed, one of the factors that has contributed to the demand for rental and ownership housing in Vancouver is their increasing population.

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Great information There is little doubt the income spread between rich and poor has increased in the past 20 years. Even still, there are only about 180,000 households with incomes above the vast majority of these households owning......

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