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Vancouver Mortgage Payments 50% of Median Family Income: BMO

Joannah Connolly
October 26, 2017

While affordability is "healthy" in most Canadian cities, condos in Vancouver are affordable but only "barely", and detached homes are “out of reach of most first-time buyers,” according to a report issued by BMO Capital Markets February 18.

Home prices in Canada excluding Toronto and Vancouver were 4.1 times the median family income in Q4 of 2014, said the report. In Vancouver, they were 8.1 times the median family income. That’s an increase from 6.5 in Q1 2005 and 5.3 in 2001 Q4.

The report also says that while mortgage payments in most of Canada consume less than one-quarter of median family income based on posted mortgage rates, that number in Vancouver is 50 per cent. For a single family home in Vancouver, it’s 80 per cent.

The report does not cite the median family income used for Vancouver, only that 2014 income is based on growth since 2012 based on the previous 10 years' average annual growth. Statistics Canada's most recent report says that median household income in Vancouver was $71,140 a year in 2012. BMO is also making its calculations based on a full mortgage on the cost of a typical property (assuming the homowners have no equity but their down payment), and at a mortgage rate of 4 per cent.

Most mortgage brokers, such as The Mortgage Group, cite the amount of the average mortgage application in Vancouver as around $300,000. At today's mortgage interest rate of 2.79 per cent, this amounts 31 per cent of the average Vancouver household post-tax income.

More on the warped view of affordability in Vancouver and skewed statistics here.

Joannah Connolly
Joannah Connolly is editorial director of Glacier Real Estate, Glacier Media's real estate division. Joannah writes and curates real estate news for Glacier Media's local newspaper websites, including the Vancouver Courier, North Shore News, Burnaby Now, Tri-City News and others. She also oversees editorial content in Real Estate Weekly Homes, West Coast Condo, Western Investor and Glacier's special real estate publications. A dual Canadian-British citizen, Joannah has 22 years of journalism and editing experience in Vancouver and London, with a background in construction, architecture, healthcare and business media. Joannah has appeared on major local TV outlets as a real estate commentator, has moderated and spoken on various industry panels, and spent two years hosting the Real Estate Therapist radio show on Roundhouse Radio.