And a new report from Zoocasa said this situation is made worse in the city, thanks to what it says is the huge gap between median income and median home prices.
It found that with homes in the city hovering around an average $1,196,000 price tag, the income required for those hoping to buy into the market is $161,193.
The catch? Median household incomes in the city are nowhere near that, clocking in at $65,327. Or, put another way, a “whopping” $97,866 short of affording the average home price.
Zoocasa said that in 16 out of the 20 markets it studied in British Columbia, “buyers do not earn enough to afford the average home.”
In fact, the report found that there are just four markets in the province where the average home price aligns with the median income in the region, with the northern interior city of Prince George being the most affordable.
The report noted that steep housing prices are also starting to be reflected in the provinces sales activity and price appreciation.
According to the latest numbers from the British Columbia Real Estate Association, sales have plummeted 33.2% from 2017, with the average price budging 1.1 per cent, to $685,749.
The total dollar value from sales also fell 34% – representing $2 billion – to $3.8 billion, a sharp contrast to the robust 30.2% increase recorded last year.
Zoocasa said much of this slowdown has been attributed to the federal mortgage stress test implemented in January, which requires mortgage borrowers to qualify at a rate roughly 2 per cent higher than their actual contract. Thats effectively slashed purchasing power among buyers, reducing the type and size of home they would now qualify for.
So what are the most – and least affordable – BC cities to buy a hime in? Zoocasa has broken it down.
Buying a typical Metro Vancouver home at the current benchmark price requires an annual income of at least $100,000, rising to $163,193 in Vancouver proper, according to a new study by real estate website Zoocasa.
The report compares the benchmark price of a home (all property types combined) in 20 B.C. cities with the income needed to service a mortgage on that home. Zoocasas study assumes the buyer has 20 per cent down, a 3.33 per cent interest rate and a 30-year amortization.
Of the 13 Lower Mainland cities included in the study, only two – New Westminster and Abbotsford – required an annual income of less than $100K to buy a typical home in the city. The highest income needed was, unsurprisingly, in Vancouver. West Vancouver was not included in the study.
It also looked at the gap between that required income and actual average incomes in the area. Zoocasa found that this income gap ranged in the Lower Mainland from around $15,000 to nearly $98,000 in Vancouver.
The most affordable B.C. city in the rank was Prince George, where the income needed for a typical home is around $43K a year, and the actual average income is $78,427 – more than $13K higher than Vancouvers average income.