The most telling way to look at house prices in any particular area is to compare them with local incomes. Divide the median house price by the median family income and you find the number of years of a local family’s income required to buy a typical house. This doesn’t mean that you can actually buy a house in that number of years — some of your money must go for groceries, transportation and so on — but the number does indicate how expensive a typical family will find home prices to be.
For example, the less expensive city in Canada is Timmins, Ontario. The median price for a single-family detached house is just $55,000.00 and the median household income $56,781.00. That’s right. In Timmins, a year’s income would not only pay for a house, but leave you with a bit left over for paint and wallpaper.
At the other end of the house-affordability spectrum is a cluster of British Columbia communities. The most expensive being, you guess it, Vancouver. The average price of a detached house is Vancouver is $699,000.00 and the median household income is $57,926.00. It would take more than 12 years of saving every penny of the median household income to buy a midrange house. If that doesn’t impress you, consider this: three out of every 10 homes in Vancouver are now listed for more than a million dollars. Even in Toronto, another notably expensive city, the median price for a single-family detached house was only 5.3 times the median household income.
Damn, if I go to Timmins, ON, I can buy a house for cash!