housing
THIS TITLE IS CLEAR: HOUSING EQUITY WILL SUPPORT PRICES
The build-up of mortgage-free equity within the Metro Vancouver market is a latent source of future demand.
It can be useful to remind ourselves that while our rental market is mostly driven by incomes, our ownership market is driven by both incomes and equity. While “equity” as a concept is easy to understand, it can be challenging to measure, and thus it’s frequently left out of conversations about housing affordability. That’s too bad, because our estimates— based on the latest Census data describing mortgage-free households by age and the latest benchmark price changes—show that there is currently upwards of $373.3 billion
of clear-title equity in Metro Vancouver. To put this into context, this is equivalent to the cumulative dollar-volume of MLS transactions throughout Metro Vancouver between March 2012 and February 2021. Within this, baby boomers—those between the ages of 55 and 74, roughly-speaking— account for $205.1 billion in mortgage-free equity, or 55% of the regional total. Looking ahead, this equity will play a significant role in our market as it becomes unlocked over the next 20-plus years.
MORTGAGE-FREE SPENDING SPREE?
22%
AGE OF HOUSEHOLD
EQUITY PER AGE GROUP
TOTAL MORTGAGE FREE EQUITY IN METRO VANCOUVER $373.3 Billion (total) +173% vs. 10 years earlier
. BILLION
23%
. BILLION
. BILLION
55%
SOURCE: 2016 CENSUS, STATISTICS CANADA; RENNIE INTELLIGENCE DATA: ESTIMATED VALUE OF MORTGAGE-FREE EQUITY BY AGE OF HOUSEHOLD HEAD IN METRO VANCOUVER
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