Vancouver housing is a hot property market now, but report says there are signs that the market will become overheated to a point that it is becoming "dangerously unaffordable" to own a home in the area.
According to RBC's Housing Trends and Affordability report for February, it has never been so unaffordable to own a home in Vancouver. In fact, single-detached homes have already gone out of reach for most buyers, The Vancouver Sun reported.
Home prices in the Vancouver area saw the biggest gain in the country with a surge of 11 percent in 2015. And with the "tight demand-supply conditions," unaffordability in this part of the country is expected to get worse in the near future.
In line with RBC's findings, Vancouver city councilor Geoff Meggs called for a reality check among homeowners, saying that the hot market is adversely affecting the economy and social cohesion.
He said, "Let's be honest - for a long time we really enjoyed that ride. There wasn't a lot of people complaining about the escalation of single-family home values until relatively recently. That love of speculative gains from land is something that's part of - I think - our province's DNA and it's not good for us. We're finally hitting the point where we see that it has very negative consequences for the majority of the population."
Meanwhile, millionaire homeowners are taking advantage of the hot market and selling their homes in exchange for new, nicer properties in B.C.'s countryside. According to The Province, real estate experts have observed an increasing number of homebuyers moving out of the Metro Vancouver and acquiring hobby farms and acreages in the rural areas.
Report from Landcor Data Corporation, a real estate data and analysis firm, showed that from 2,988 units sold in 2014, there were 3,226 units of single-detached properties of over 2 acres sold last year. The demand in small rural properties is expected to continue rising, particularly hobby farms that are less than 10 acres.
