A report is shedding some new light on the astounding amount of income Vancouver renters are spending on rent.
This revelation comes despite the fact that most rent reports over the past year have suggested rents are decreasing in the province’s major cities.
SingleKey’s most significant revelation is that rent and debt payments are eating over a third of Canadian residents’ incomes, and it’s worse in B.C.
Data from SingleKey’s Rent Intelligence Report shows that the average Canadian renter is earning around $67,537 per year, and the average household income is roughly $109,000. SingleKey says that the median renter age is 32 years old.
“In Vancouver, renters earn $146,194, maintain top-tier credit (731), and pay $2,891 in rent, yet still spend over 30 per cent of their income on housing.”
The data shows that B.C., as a province, as well as the City of Vancouver, have the highest average rent-to-income ratios in Canada.
Some other highlights, or rather lowlights, for the region include the fact that while British Columbian renters are the most financially stable in Canada, they’re also the most stretched.
“Despite reports of rent prices softening, affordability remains a major concern with other necessities rising in cost,” SingleKey notes.
“The national average shows that renters are spending over one-third (38.6 per cent) of their income on rent and debt repayments.”
Vancouver is a special case as it’s above the national average for income spent on rent and debt repayments, and SingleKey points out that the risk isn’t just for renters but for landlords too.
“In Vancouver, that number climbs to 41.6 per cent. These figures put most renters well above the 30 per cent affordability threshold, signalling increased financial vulnerability for tenants and greatest risk exposure for landlords.”
Province-wide, the average B.C. renter earns $125,516 per household, but spends 33.9 per cent of income on rent, or 40 per cent when debt is included.
According to the Canadian Centre for Policy Alternatives (CCPA), “In Canada, we have typically used a threshold of paying rent less than 30 per cent of gross or pre-tax income as the benchmark of affordability.”
“For example, a person earning $50,000 per year should be spending no more than $15,000 per year (50,000 x 30 per cent), or $1,250 per month, in rent for their situation to be considered affordable. The higher one’s income, of course, the more options at higher rents are affordable,” the CCPA adds.
“Renting has changed in Canada, and the numbers prove it. We’re seeing responsible,
creditworthy renters in their 30s spending over a third of their income just to keep up. Many rely on a second income just to qualify. And while rent may look more affordable in some regions, our data shows those markets can carry hidden financial risks for property owners,” says Viler Lika, CEO of SingleKey.
SingleKey is Canada’s leading rental risk intelligence platform.