Up in Vancouver BC, analyst Jens von Bergmann calculates that the increase in land value for single family houses over the past year exceeded the total income earned by the entire population of the City. Median increase was $262,000, average was $318,877. Von Bergmann estimates this to be equivalent to $126/hour, assuming people work a 40 hour week 62 weeks per year (allowing for multiple-worker households). By comparison, actual labor yields an average income of $26/hour (all figures in multicolored Canadian dollars, of course).
But the land price appreciates every hour of every day, so it might make more sense to calculate the median increase as $29.89 (mean $36.38) per hour.
Of course this cannot continue indefinitely, but something like it has been going on for a long time in Vancouver, as well as a few other cities. Wealthy international buyers from less stable places want a refuge, as well as perhaps an investment. But even this group, depending on developments overseas, must eventually be limited. Some analysts — Garth Turner comes to mind — have been warning of a crash for years and years.
What really impresses me about von Bergmann’s analysis is that BC assessment authorities appear to do a decent job of estimating land value, and making the data broadly available. It’d be worth something to live in a place like that.
h/t Wealth and Want.