The title may be a bit confusing at first, so we’ll explain.
Canadian housing has long been criticized as being greatly overpriced. Generally house prices had more or less followed general salary rates and inflation, so as a very rough estimate, increases were about a 1.5 per cent increase annually. That was up until say the late 1990’s and ever since
In major Canadian cities house prices (along with condos and even rental units) have been rising far faster than either of those factors at anywhere from five to ten percent annually. This is most especially the case in Vancouver, British Columbia (and region), and Toronto, Ontario, (and region). A recent study showed prices in the greater Toronto area rising by 33 per cent over a year ago.
In 2015, the US ratings agency Fitch said Canadian housing was over-valued by 20 per cent. In spite of that, there is no sign price increases are slowing.
On the other side of the coin, in Canada the overall average wage hovers just below C$50,000.
In Vancouver and Toronto the already high house prices have doubled (or more) in the past decade and here’s where a house earns more than you.
Take the case of the house at 3981 West 35th Ave in Vancouver (shown in the photo above). It was bought in 2000 for $739,000. In 2014 it sold again, this time for, $3,038,000. So in a sense, that means the house “earned” $164,000 a year, far more than most Canadians annual salary, and in fact even more than the mayor of the city of Vancouver who gets $155,612 a year.
In Toronto the average housing price rose from $688, 011 a year ago, to $916,567 so far this year. When you think of it, a house could have “earned” well over $200,000 in that year.
In both hot markets the average price for a detached home is now $1.2 million in Toronto, and $1.5 million in Vancouver. The average salary increase in Canada for this year is expected to remain similar to that of 2016 at more or less 2.6 per cent.
Additional information-sources
- Workopolis: average Canadian wage by province
- PostMedia: T Hopper: Jun 19/17: houses make more than most Canadians earn
- Bloomberg (Financial Post) Apr 5/17: Toronto prices soar.
- Globe and Mail: R Carrick: Mar 2/17: dark side of the housing boom
- Globe and Mail. J McFarland: Sep 7/16: wage increases-flat
- RCI;Jun 8/16: high house prices bad for cities
- RCI: Apr 22/15: prices far above reality
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