Average income needed surges
The family income required in order to buy an average home in Vancouver rose by more than $25,000 within only eight months in 2023, as reported in an article by Daily Hive.
Ratehub.ca found that a yearly household income of $246,900 is now required for a family to secure a mortgage for an average home in Vancouver. This is an increase from Ratehub’s calculations in March 2023, which stood at $221,580.
The income requirement increase was partly due to home prices rising in the region, with the average price increasing by 3.5%. In November 2023, the average home price was under $1.2 million.
Other factors that affected the income requirement were interest rate hikes and harder stress tests. Throughout 2022 and into 2023, the central bank has been hiking its key rate which makes applying for mortgages more expensive than a few years ago. Prospective buyers also need to qualify at 8.5% interest for a mortgage with a 6.5% interest rate, according to the stress test.
While home prices softened in other parts of Canada, it was still expensive to purchase overall due to higher rates.
According to the Canada Mortgage and Housing Corporation, the average income of a family in Vancouver was $96,423 with the median being $73,000, which further pushed the idea of homeownership out of reach of the average Canadian.
