The first step to owning a home is to save up for a down payment and for the average Vancouver home buyer, they’d have to save for nearly 40 years.
According to a new report from the National Bank of Canada (NBC) on housing affordability, for a detached home in Vancouver, a home buyer would have to save for 452 months for a down payment for a saving rate of 10%. That equals just over 37 years.
This is based on a market representative home price of $1,660,074, with an annual household income of $285,078.
For the Vancouver home buyer who’d settle for a condo, they’d have to save for 63 months for a down payment. This is based on an average condo price of $709,092, with an annual household income of $142,357.
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According to NBC, we’re currently in the “worst decline for housing affordability in a generation.”
The NBC report highlights the fact that affordability in Vancouver kicked off the same way in 2022 the way it had been for most of the previous year. Home prices continued to rise alongside already high interest rates which have been rising as well.
Vancouver vs. the rest of Canada
Compared to basically every other major market in Canada, the situation in Vancouver is dire for prospective home buyers.
Unsurprisingly, NBC calls Vancouver the least affordable city in Canada to buy a dwelling, with “the representative mortgage payment now reaching 81.4% of the median income.”
In Montreal, based on a market representative home price of $553,095 and an annual income of $112,220, a home buyer would need to save for 51 months for a down payment for a saving rate of 10%. Still a decent chunk of time, but not 452 months.
In Calgary, based on a market representative home price of $533,082 and an annual income of $108,353, a home buyer would need to save for 38 months for a down payment for a saving rate of 10%. That’s 414 fewer months than how long it would take a Vancouver home buyer.
In Edmonton, based on a market representative home price $445,295 and an annual income of $90,807, a home buyer would need to save for 31 months for a down payment for a saving rate of 10%.
Victoria is the only city that comes close to Vancouver when it comes to how long you’ll be saving for a down payment.
Based on a detached home cost of $1,188,394 and an annual household income of $204,078, it would take 382 months to save for a down payment for a saving rate of 10%.
Unless you’re expecting to inherit a home or you’ve won the lottery, your best bet is to start saving now or explore outside of the Lower Mainland or even the province, especially if you’re thinking about a detached home.