– part of an ‘infographic’ from The Globe and Mail, 18 Oct 2011
One of these provinces is not like the others… – ed.
All I can say is “wow”. That graph is really telling, showing that a) we got screwed on wages, and b) houses are WAY too popular right now.
Though I suppose if we aren’t making money working, people will find other ways to try…
Pop quiz: how does the 99% become part of the 1%?
Capital, good chap, capital.
Which province is not like the other? Oh, I know! Newbrunswick, where wage growth almost outstripped house price appreciation. What do I win?
A trip to New Brunswick.
1st Prize A trip to New Brunswick
2nd Prize A weekend in New Brunswick
3rd Prize A fortnight in New Brunswick
“One of these provinces is not like the others”
New Brunswick. Everyone else is screwed.
Yeah this pretty much explains why i went to college in nova scotia and ended up staying. 4 bedroom house 5 mins to dalhousie costs 330k. There are high paying jobs in commerce and accounting but thats about it.
The Quebec house price increase is shocking at first — but then look at the reference year (1976).
Price/income (roughly) from that infographic.
NB——->2.5 NB —->2.7
Even though those numbers are adjusted for inflation, I wonder if things such as the cuts in various government services are factored in. For example the 1976 – 1980 25 to 34 crowd probably graduated from universities before the giant student loans that are normal today. There probably a lot less user fees for various services, not sure if taxes were lower … etc
Also I think the normal inflation index does not include volatile things like energy, would the long term index shown above includes inflated energy costs?
Taxes were not lower in the late 70s, and were much higher by the early 1980s. The Feds and most provinces were cutting taxes by the late 1990s & early 2000s and they remain somewhat lower today, though they’ve started to creep back up. The exception would be property taxes, which are almost certainly higher today.
The CPI does include food and energy, only the Core CPI excludes it. When people talk about general inflation, it is the CPI they use, not the core rate. The core rate is used more by the BoC to set monetary policy. However, some (like myself) do argue that even the CPI does not completely account for cost of living increases, due to the substitution adjustments made regularly to the index.
You’re right about the student debt, and probably the user fees and service levels too.
“Which province is not like the other?”
One of these things is not like the other. One of these things doesn’t belong.
It’s not NB. Although NB is lovely 🙂
Look at incomes adjusted for inflation.
So BC is the only province where adjusted median income has shrunk and also has had the greatest increase in adjusted home prices. Yet another reason that the bubble bursting in Canadian real estate will hit BC the hardest. The rise in home prices has been surreal, so to will the aftermath.
The parallels to Spain are disturbing. The only thing BC has going for it compared to Shpoyne is labour mobility and some transfer payments but that’s not positive for real estate, it just helps re-align employment rates more quickly.
Check out the two graphs for comparison:
I don’t know much about macro stuff but they are showing similar diversions from zero.
I can think of a point or two that this graph makers about lotus land:
1) the proportion of satellite families with low declared income and high value homes has grown
2) the proportion of home-rich, “retired” HELOC spending home-owners has risen (low income, high home value)
3) the proportion of individuals collecting grow-op or other non-declared black market income has risen
4) Higher paid jobs are leaving town, while lower construction wages replace them
I was curious about #2. Some numbers here.
1975 total pop. BC: 2,499,000. Older than 65: 237,000 = 10.5 percent
2009 total pop. BC: 4,442,000. Older than 65: 637,000 = 7 percent
“retired” does not mean over 65…..
Nice points – 1) and 2) for sure based on my own personal knowledge and experience. Perhaps 4) but not sure that there was ever an abundance of high paying jobs in the populous lower mainland. As far as 3), I’ve simply noticed a much larger Asian gang element in the GVRD than 10 years ago and there seems to be a more prevalent fear over this among some Asian Canadians that I know. And for good reason based on one experience I had in a predominantly Chinese condo complex in Surrey. Dorothy, you’re not in Kansas anymore!
B.C – The Most Unequal Province
We used to live in Vancouver. Moved back to Ontario a few years ago. My part-time, contract job (1 day per week) pays an annual income almost equal to the average annual income in BC and my house costs one fifth of the average Vancouver home price. A similar job in BC would pay me 1/2 of what I earn in Ontario! We have a beautiful century home just north of Toronto that doesn’t require repairs. When home owners spend an average of 90% of their pre-tax income on their primary dwelling, it’s only a matter of time before the cracks appear – and that’s not even factoring in a marginal rise in interest rates and other inflationary pressures. Using intuition alone, I don’t know how this “system of wealth” can continue in Vancouver. Maybe its time to make money the old fashioned way and actually invest in retirement plans. There’s a reason why the feds are strongly encouraging Canadians to reduce their debt burdens.
The statistic which you have mentioned above is good and that one is true. Really housing prices are increasing so fast..
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