You need a $219,239 income and 31 years of savings to afford a Vancouver house

By: Zandile Chiwanza on November 12, 2019

The cost of owning a home in Vancouver dropped to its most affordable level since 2016 in the third quarter, according to the Home Affordability Monitor by National Bank of Canada released today.

The monthly mortgage payment as a percentage of income has reverted to its Q1 2016 level, helped by a cumulative decline of home prices (down 8.1% since their peak). 

Still, affordable is a relative term. The household annual income needed to afford a home in the city is now $219,239, down from $242,096 reported at the beginning of the year

Unfortunately, not only is the average home way out of reach for the average Vancouver resident but so is the time needed just to save for a down payment. It person is required to save for 378 months — or 31.5 years — to get a 10% down payment on a representative home. While that’s down from 415 months (34.6 years), it still means that a student graduating at 22 will have to save until their 50s for a down payment.

Similarly. Toronto's housing affordability also improved in both the non-condo and condo due to lower interest rates and rising incomes. The household annual income needed to afford a home in Toronto is $188,299 and to afford a condo you need $117, 235.

While Canadian housing affordability is now in line with its historical average (43% of median income) the bad news is economists say it likely won’t last.

“Despite some welcome progress in the last three quarters ... the situation remains difficult in the two largest markets by housing market value,” wrote economists Matthieu Arseneau and Kyle Dahms in the report.

Surging population growth in Canada’s largest metro areas, coupled with leveling mortgage rates should limit the scope for further improvement in home affordability.”

Countrywide, affordability also improved the most in Victoria and Hamilton, while Winnipeg and Montreal saw the smallest improvements.