Owning a detached home in New Westminster 15 years from now could be more of a pipe dream than a reality.
According to a Vancity report called Downsizing the Canadian Dream: Homeownership Realities for Millennials and Beyond, if housing prices continue to rise while incomes stay stagnant, affordable communities like the Royal City will be a thing of the past.
"New West has some good values right now, but the way the rate of incomes are increasing in relation to real estate, in 15 years, it'll be a much more restricted market," said Andy Broderick, vice president of community investment at Vancity. "The traditional view of a home as a way to build your retirement or build equity will become less common."
The report uses the Gross Debt Service ratio (GDS), or how much debt a person can have in relation to the income, to paint the picture. Canada Mortgage and Housing Corporation states housing costs should not exceed 32 per cent of a homeowner's monthly income. Right now, the 2014 GDS for New West sits at 32 per cent, but is expected to rise to 40 per cent by 2030. Areas like Richmond could hit a GDS of almost 70 per cent, while Burnaby and Coquitlam could peak above 50.
Broderick predicts if nothing changes, locals will be forced to do what many Vancouverites have done - either rent or move east to communities like Langley.
"It's not about which areas are more severely hit, but more about those trends, and that eventually, they'll catch up with the whole region unless policy changes are made to try and address that," he said.
It's not too late, however, to change course, Broderick noted.
The first thing people can do, he said, is to talk to leaders at all levels of government, "to elevate the issue and say you're concerned about the trend."
Simply being aware of the bleak situation, Broderick added, is also important.
"I think people who own homes are frequently caught up in the value that's being created, which is good, but most of them have children who may not be able to participate the next time around. Raise awareness and be thinking about it."
The last tip he suggests concerns the policy-makers.
"Those could be policies related to making sure the local economy is growing, that incomes are growing at a faster rate. It could be around making sure local zoning provides the greatest amount of density in areas where there's good transportation."
By 2030, the report states Langley will remain the only affordable place to live within Metro Vancouver, with a GDS of 26.8 per cent. West Vancouver is on the other side of the spectrum, at 238.20 per cent, followed by Vancouver at 108.38 per cent and North Vancouver at 99.85 per cent.
The good news is that buying condominiums in most communities will remain largely affordable, Broderick said. Owning a condo in New West will only require 26 per cent of one's monthly income.
