A reader who borrowed 2.3 times annual income to buy in Kitchener, Ontario, in 2006, marvels at how locals here in BC are being tempted by developers to borrow 5.8 times income in 2010. As the banker in the anecdote earlier this week said, “the banks have leveraged up the Canadian citizenry to unsustainable levels.” -vreaa
This from Angela by e-mail to VREAA 20 July 2010 –
“In 2006 I bought a 2bedroom/1bathroom 800 sqft condo in Kitchener, Ontario. My income was approximately $45,000 at the time. My bank manager, who I had a good long-standing relationship with, approved me for $103,000 at 4.4%, fixed rate. [2.28 x income -ed.] She said, “Spend whatever you want on a place, but that’s the biggest mortgage we’re going to give you.” And that mortgage was HUGE to me. The payments were about $350 every two weeks, plus condo fees of $190.
Now I have found something that adds to your argument that Vancouver prices are unaffordable and buyers are headed for a world of hurt. ‘Madison Crossing’ is a development planned in Langley. Here is an extract from an ‘affordability spreadsheet’ found at the developer’s website: