Staggering income needed to afford a Vancouver home jumps this month

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Thinking of becoming a homeowner in Vancouver? Despite a cooling in the housing market, a new report for 2024 finds that, even if you make a staggering income, you might still be too far from the threshold to buy the average house in the city.

That’s according to Ratehub.ca, which found even the rich can’t buy their dream home — unless their income sits well above $200,000. Plus, even if they were rich enough last month, their income had to have grown by $2,500 from January to February. Yikes.

Vancouver Affordability Report February 2024.

The report found that the income required to buy a home in Vancouver is a whopping $230,350 annually, due in part to the average home price rising between January and February to $1,183,300. The benchmark price includes all residential properties. Detached homes average $1,972,400.

It’s a bit of a turnaround from what we saw last month, the mortgage calculator website found.

Ratehub.ca reported that the amount was lower between December and January as one of Canada’s most expensive cities saw a slight cooldown, but after that brief reprieve, it’s back to trending upwards.

Compared to the rest of the country, Vancouver didn’t see as big of an income change as Toronto but was still far above places like Edmonton or Ottawa.

“The two key variables, which are home values and interest rates, have moved in opposite directions since January; interest rates are down and home values are up in 12 out of 13 cities. The increase in home values was enough such that affordability decreased in 11 of 13 cities despite the rate drop,” James Laird, co-CEO of Ratehub.ca and president of CanWise mortgage lender, said in a release.

Perhaps surprisingly, Victoria saw a slight decline in income required, despite a minimal change in the average home price between January and February.

Across the country, home price changes last month were flat compared to the first month of 2024, a notable shift in market conditions.

The Canadian Real Estate Association (CREA) said it was “exceedingly rare” that home prices have fallen for five consecutive months, including a drop of 1.3% between December 2023 and January 2024.

“It’s looking like February may end up being the last relatively uneventful month of the year as far as the 2024 housing story goes,” said Shaun Cathcart, senior economist of CREA, in a statement.

“After two years of mostly quiet resale housing activity there’s a feeling that things are about to pick up,” said Larry Cerqua, chair of CREA. “At this point, it’s hard to know whether buyers are going to wait for a signal from the Bank of Canada or whether they’re just waiting for the spring listings to hit the market.”

The Bank of Canada held the overnight rate at 5% last week, continuing its policy of quantitative tightening.

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“The Council is still concerned about risks to the outlook for inflation, particularly the persistence in underlying inflation. Governing Council wants to see further and sustained easing in core inflation and continues to focus on the balance between demand and supply in the economy, inflation expectations, wage growth, and corporate pricing behaviour. The Bank remains resolute in its commitment to restoring price stability for Canadians,” the Bank of Canada’s website reads in part.

The next interest rate announcement will be in April.

With files from Kenneth Chan