In our seemingly never ending quest to explain who is buying our overpriced houses here in Victoria, we give you this.
Some highlights (all numbers 2004):
"Total income” in this case includes income from employment, investment, government transfers, private pensions, registered retirement savings plans and other income. You know. Total.
Median total income of all people (working or not) in Canada: $24,400 or $12.20/hour
In 2004, you were in the top third of incomes if you made more than…are you ready? $35,000.
Only 19.8 percent of Canadians with an income made $50,000 or more in 2004.
Now, although a bit over 12 percent of individuals had incomes between $50,000 and $75,000, the atmosphere thins out pretty quickly above that. Only 7.6 percent of people had incomes of $75,000 or more in 2004. Only 3.4 percent made $100,000 or more. And by the time we get to the $150,000 or more category, we're down to just 1.3 percent of income recipients.
What about families you say? “Couple families” are couples (married or common-law, including same-sex couples) living at the same address, with or without children.
The median total income from all sources for all members of such families in 2004 was $64,800. Less than a quarter of such households had total incomes of $100,000 or more. And just over 8 percent had incomes of $150,000 or greater.
What does this all mean? Considering that it takes a household income of $134K to purchase an average home in Victoria at $521K with 25% down at 5% interest over 25 years, we're talking about less than 25% of Victorians can buy an average SFH. Think about that. Less than 25%, many of whom will already own. No wonder why there are so many condos being built and so many alternative mortgages being sold.
5 comments:
So the question then is how are people getting into real estate here in Victoria?
S2
I think the question is "why" are they buying in ?
And the next question is "when" will this point in any overvalued market is reached will people stop buying which reverses the supply/demand ratio ? It happens at the gas pump and any other product,people say enough is enough and stop buying.
So back to the "why", if you have mininum or no down payment, why would you max out your whole life style existence for 4 walls and a piece of dirt that has a very high chance of losing value to the tune of 10's of thousands of dollars overnight ?
And "what" drives people to throw common sense out the window when you can barely afford it ?
All three answers are to me still all purely psychological,wait til a few friends can't come out to play anymore cause they are house poor,or the furnace broke and they gotta get a second job to pay for it, or the media puts out the first news on price declines, then look out,the tears and emotions will get very very heavy.
People on another site I'm on still think the party is never going to end (the band is still playing while the Titanic is sinking). Those who have bought or, more specifically, traded up are telling others that are not in yet to get in before they are locked out forever. Makes me sick to my stomach but they are adults and as much as you tell them with concrete numbers what is happening they just don't want to listen. I think the longer it goes the harder the fall. TC had an interesting article today on the US problems. I wonder how many Victorians will read it and then bury their heads in the sand?
S2
"Those who have bought or, more specifically, traded up are telling others that are not in yet to get in before they are locked out forever. Makes me sick to my stomach but they are adults and as much as you tell them with concrete numbers what is happening they just don't want to listen."
I just heard that line again over the weekend,my reply was they told me that in 81 a tthe top and 1990 at the top then and it didn't happen. Every decade has to have a correction if prices exceed wages/rents ratios,it's basic math and economics. These real estate sales people are total slime to suck in so many gullible people on this total lie. The RE industry will wear it bad when the correction hits.
I believe I recently read somewhere that the median HOUSEHOLD income in Victoria was about $45,000.00
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