Buying a home on income alone a challenge in Metro Vancouver, study shows

VANCOUVER (NEWS 1130) — If you’re having trouble trying to save up for a down payment based on what you make at your job, you’re not alone, as a new study highlights just how much home prices have detached from local incomes in the Lower Mainland.

In a study released Thursday by the Canadian Housing Statistics Program, which looked at properties sold in 2018, the median price-to-income ratio in British Columbia was 5.4, more than double that of the eastern provinces of Nova Scotia and New Brunswick.

We've all felt this for some time, but a new study spells out how hard it is to buy a home in Metro Vancouver on income alone. Tune in @NEWS1130 as we discuss the latest report from the Canadian Housing Statistics Program with UBC economist @TomDavidoff #VanRE

— Martin MacMahon (@martinmacmahon) October 11, 2021

Vancouver itself had a price-to-income ratio of 7.4, while the study makes note that low-income property buyers in the province had a price-to-income ratio of 18.

Associate Professor at the University of British Columbia’s Sauder School of Business Tom Davidoff says incomes alone don’t support housing prices across B.C., noting a combination of generational wealth, capital gains, or wealth from overseas support the province’s high housing prices.

“The bad news is, just making a living in British Columbia, it is tough to afford housing prices here,” he said.

Davidoff says the housing market is hard for Lower Mainland residents to crack into, and to give yourself a break if you’re trying to save for a down payment.

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“Both the payments on mortgages, and just coming up with a five, or hopefully 20 per cent, down payment to buy a property — it’s tough for locals.”

The stark difference between Nova Scotia and British Columbia’s price-to-income ratio, is most notable to Davidoff, however, he says this is the reality for people who have been looking to buy, or even rent, in Vancouver for a long time, so understands people may not be shocked by the news.

“Just the last year prices have really escalated dramatically throughout Canada, and throughout North America. But in the case of Vancouver, that’s been throwing fuel on the fire,” he said.

“People are really stretching to make housing work in an expensive place based on their incomes.”