Is There Canadian Real Estate Affordbility Crisis?

Victoria and Vancouver Island's Top Real Estate Agency Weights In On The Real Estate Affordability Crisis.

Does Canada Have an Affordability Housing Crisis?

Yes we do! And it's a national problem. Over the past two years, house prices have gone up by 50%. The typical home price in Canada across the country is over $800,000. It's a huge problem. There's a big disconnect between what people earn and what housing costs. The average salary in Canada is just over $50,000, but the average home price is more than 10 times that. So there's a big gap.  This has affected Vancouver Island as well and Our Top Real Estate Agents work hard at helping clients navigate through these challenges. 

There are a lot of factors driving up housing prices, including low interest rates, population growth, and limited supply of land and housing. Governments are trying to address the problem by increasing investment in affordable housing, but it's a complex issue and there's no easy solution.

The current housing market in Canada is not favouring the increasing population and their demand for affordable houses. A recent study conducted by RBC reveals that Prairie and Coastal residents are struggling with higher than normal levels of debt relative to their incomes, which is a leading concern for these Canadians who have no choice but to spend all their incomes and savings on buying a house.

The Canadian Governement recognizes that the affordable housing crisis is growing and it is becoming increasingly challenging to find a safe and affordable place to live. That's why Budget 2022 proposes a series of investments to build more houses, help people save for their first home, and curb speculation and unfair practices that drive up housing prices

Real Estate for Medium to Low Income Families

Buying real estate in many areas in Canada is challenging for families in a medium to low income bracket due to the lack of affordable housing and sky rocketing real estate prices. So what's the solution for low to medium income earners?

The solution seems time consuming but instructive – build more houses! But will this create affordablity?  Well, empirical evidence, that adding new homes moderates price increases and therefore makes housing more affordable to low-and moderate-income families.

Lots of people may suggest you sell your car or get rid of your vacations, or lowering your living standards so you can afford a new home. You should be thinking about just getting a new house not lowering standards.

Is building more houses realistic? What is the magic number of houses? Who would build the new houses and where? These questions are difficult to answer. More practical ideas or outside the box thinking might rescue us from this housing crisis, but building more houses has one virtue – it is incredibly instructive.

Could Different Housing Types Fill The Gap?

Different housing types could potentially fill the gap in affordable housing. Different types of housing, such as duplexes, triplexes, and fourplexes, could provide more affordable units for low-and moderate-income households. Additionally, accessory dwelling units (ADUs) could be used to provide more affordable housing options.

Examples of Alternative Housing Types

1. ADUs

2. Mobile homes

3. Shipping container homes

5. Tiny homes

4. RV Units

What are ADUs (Accessory Dwelling Units) and why build them?

ADUs are accessory dwelling units, typically built in the backyard or garage of an existing home. They are often used as rental units, providing income for the homeowners and additional housing options for renters in crowded urban areas. examples are: An apartment over the garage; A tiny house (on a foundation) in the backyard; a basement apartment.

Mobile Homes and why live in them?

Mobile homes offer a number of advantages over traditional stick-built homes. They can be much cheaper to purchase and maintain, and they can be moved if necessary. Additionally, mobile homes parks often come with amenities like pools and clubhouse access that residents of stick-built homes would have to pay for separately.

What are Shipping container homes?

Shipping container homes are homes that are made out of recycled shipping containers. These homes can be very sustainable and efficient, as they often use less energy to heat and cool than traditional homes. Shipping container homes can also be very affordable, as they often cost a lot less to build than traditional homes.

What are Tiny homes and why they are growing in popularity?

Tiny homes are small homes, typically under 500 square feet. People choose to live in them for a variety of reasons, including wanting to downsize their living space or wanting to live more sustainably.

The benefits of Tiny home living:

• Living in a tiny house generally means that you will have smaller bills, which will in turn allow you to save the money that you might have spent living in a large house.

• Tiny Houses are much easier to heat and require less power. Many tiny homes are even completely off-grid, thus leading to even more savings.

• Purchasing a tiny home generally means that you will be paying considerably less than what you would if you purchased a traditional home. This can lead to the greater likelihood that you will be mortgage-free in less time.

What are Extended living RV Units ?

Extended living RV units are designed for people who want to live in their RVs for long periods of time. They typically have more storage space, better insulation, and higher-quality construction than traditional RVs. Extended living RV units even come with features like full kitchens and bathrooms, making them more like miniature homes than campers. They are gaining popularity as a affordable living option where they can be set up in small areas like lake lots and and rual land plots.

Solutions For Affordable Housing

One thing is for sure, we need to think outside the box when it comes to creating or finding affordable living solutions. There is no one size fits all answer and there never will be.

"We are only restricted by our own creativity and mindset."

At The Neal Estate Group, we have the Top Real Estate Agents on Vancouver Island, they are committed to helping their clients find solutions to their challenges.

Talk to Neal Estate Agent today and lets see what we can do for you.