Northern BC housing affordability surveyed

In 2015, home ownership in Northern British Columbia remains exceptionally affordable, especially when compared with Vancouver.

Almost all communities in Northern British Columbia saw improvements in affordability in 2015.

Almost all communities in Northern British Columbia saw improvements in affordability in 2015.

The BC Northern Real Estate Board (BCNREB) Housing Affordability Indicators estimate the proportion of median household income required to cover mortgage costs, municipal taxes and fees, and utilities for the average single family home.

This edition of the Housing Affordability Indicators for Northern British Columbia is based on a refreshed data set that updates baseline variables to 2010. The revised indicators correct for errors that can develop over long periods of extrapolating baseline data. The Housing Affordability Indicators in this edition tend to reflect better affordability across communities in Northern British Columbia than previous information.

Home ownership in Northern British Columbia remains exceptionally affordable, especially when compared with Vancouver. In 2015, The Housing Affordability Indicator for Northern British Columbia was 27.9% compared to 87.1% for Vancouver and 70.4% province-wide. Historically, the largest contributor to these differences has been house prices, and this trend continues for 2015. The average price of a single family home sold in Northern British Columbia in 2015 was about $280,000. Q2 2015 statistics list average Vancouver house prices at $967,500, while the provincial average was almost $720,000.

Price growth in 2015 varied widely from community to community. Average house prices in Prince Rupert and Smithers increased significantly. The highest average house prices in Northern British Columbia are still found in Fort St. John, although growth stalled in 2015. After consecutive years of significant price growth, Kitimat finally saw some price relief in 2015, falling 6.1% to just under $300,000.

Almost all communities in Northern British Columbia saw improvements in affordability in 2015, some of them significant. Williams Lake and 100 Mile House saw affordability improve by more than 9%, while in Kitimat the improvement was nearly 12%. Only Smithers and Prince Rupert saw affordability worsen, in both cases due to significant increases in average house prices. The most affordable community in Northern British Columbia remains Mackenzie, where homeowners require only 20.1% of their annual income to cover the costs of housing.

Representative of the general trend of the region, Northern British Columbia’s largest community, Prince George, has experienced marginal increases in house prices, and virtually no change in affordability over the last 5 years.

The methodology for constructing the Housing Affordability Indicators for northern BC is based on the construction of the RBC Housing Affordability Measures. The northern BC Indicators provide a measure the relative costs of home ownership by calculating the proportion of median household income required to service the cost of local taxes and user fees, utilities and mortgage payments for the average-priced detached single family home on a lot of one acre or less..

Benchmark data for median household income are drawn from the 2011 National Household Survey (NHS) which provides income information for the year 2010 by community and region. Median income for the community of 100 Mile House is not reported in publicly available NHS data tables. Median income for the District of 100 Mile House was obtained from a community profile on the Trade and Invest BC website. Median income for northern BC is a weighted average of communities in the region. Median household income is adjusted by the growth rate for average weekly earnings for British Columbia to estimate income in years following the 2010 benchmark year. Average weekly earnings are obtained from CANSIM tables on the Statistics Canada website.

Benchmark data are drawn from the 2010 Survey of Household Spending for British Columbia. There is no regional breakdown of utility costs, which include water, electricity and other fuel costs. Estimates beyond 2010 are obtained by using growth rates for the CPI component covering water, fuel and electricity. An estimate for the growth in the Consumer Price Index for British Columbia excluding Vancouver and Victoria is calculated based on an arithmetic average for the CPI component for BC, Vancouver and Victoria. Data for these component CPIs are obtained through CANSIM from Statistics Canada.