‘Something Is Not Working Here’ – “The median after-tax income for families of two or more people in B.C. have remained unchanged at about $67,000.”

“The median after-tax income for families of two or more people in B.C. remained unchanged between 2008, 2009 and 2010, after adjusting for inflation, said Wendy Pyper, analyst at Statistics Canada. There was a slight increase between 2007 and 2008, from $66,400 to $69,900, but since then incomes have remained unchanged at about $67,000.”
…
“Something is not working here [in the Canadian economy], this is not a positive report,” said Benjamin Tal of CIBC World Markets.
…
Canadians are spending beyond their means and it’s starting to catch up with them, said Jeffrey Schwartz, executive director of Consolidated Credit Counseling Services of Canada, Inc. “It’s going to be even more of a problem if they continue these behaviours if their incomes are not rising,” Schwartz said. “If we see everything else go up in price, then they’re going to have trouble affording much of anything. It’s really important for Canadians to get their spending in order and reduce their debt.”
– from ‘Despite economic growth and job gains, family incomes remain stagnant’, Vancouver Sun, 18 Jun 2012

Housing prices ultimately follow incomes; if they go through a period of decoupling from rates of income growth, they will eventually reconcile. – vreaa

“A few months ago I applied for a pretty advanced software engineering position at a local company. I realized that if a potential employer here asks you why you live in Vancouver they are just setting you up to expect a crap pay.”

ams at VREAA 20 May 2011 8:02pm – “A few months ago I applied for a pretty advanced software engineering position at a local company, thinking I can get away from traveling east for doing consulting work. I was surprised that one of the questions that was asked in the interview was “Why do you want to live in Vancouver?” I thought it was a strange question but then right after that we talked about salary expectations and discovered my expectations and their were off by about 30K to 40K. That is when I realized that if a potential employer in Vancouver asks you why you live in Vancouver they are just setting you up to expect a crap pay. I think employers in this town think oh why yes you live in Vancouver you should be happy so shut up and accept crap pay because baby you are in Vancouver!”

[Note juxtaposition with next anecdote -> It’s tough for both employers and employees in over-expensive Vancouver. -vreaa]

“I made $185K in 2001; $215K in 2010. Ten years more experience accounts for some of that increase. How can prices of high-end houses have sustainably tripled!!? What has changed since 2001, except interest rates and stupidity?”

TIME MACHINE at vancouvercondo.info January 1st, 2011 at 11:09 pm writes – “Houses that sell for $800K today were in many cases much less than $300K [ten years ago]. Take a look at this link listing some 2001 Vancouver sales.
1105 W 32ND AV is interesting. In 2001 someone paid $585K for a 3000 sq ft house on a corner lot in Shaughnessy that is at least 50 feet wide. That house would be a minimum of $1.8m today.
What has changed since 2001, except interest rates and stupidity? In 2001, BC had a healthy forestry industry. What industry does it have now, other than real estate development??
I am at the top end of income earners in this city. I made about $185K/year in 2001. In 2010 I made about $215K. Ten years more experience accounts for some of that increase. How can prices of high-end houses have sustainably tripled!! when my high-end income hasn’t even gone up by 20%?
Please don’t mention rich Asians, etc. because they have been here for decades, and were certainly here long before 2001.”

Great comment, TIMEMACHINE; directly to the crux of the matter.
Growth in price of housing cannot sustainably depart from growth in incomes. See the illustrative chart below. And see this post for the source of the temporary divergence. -vreaa