Clients who want to buy property in Vancouver should confirm they can afford it.
The cost of owning a detached bungalow in Vancouver is $967,500. That amount is double the Canadian average, according to an RBC Economics report.
And even if a client can afford the down payment, 88.6% of his pretax household income will go towards homeownership costs, notes RBC Economics. This includes mortgage payments, taxes and utilities.
To compare, a detached bungalow in Toronto would take up 59.4% of a homeowner’s pretax income, 36% in Montreal, and 32.4% in Calgary.
“Vancouver’s housing affordability readings are nearing the worst levels ever recorded in Canada, but this is still not reining in buyer demand at all,” says Craig Wright, senior vice-president and chief economist, RBC. “Given the current high degree of tightness in the market, further price acceleration and affordability deterioration are very likely in the near term.”
Condos in Vancouver, however, are slightly more affordable. It would cost 40.1% of a homeowner’s pretax income to own one.