Can I actually afford a home in Vancouver?

by Richard Morrison
June 29, 2022
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The housing market in the Greater Vancouver area is notoriously difficult to navigate. Prices have skyrocketed since the housing pandemic hit BC and are not promising for those who want to purchase a home in the city. It is generally assumed that you should be a millionaire to buy a house in Vancouver.

For 2023, the cost of an average detached home in the area is $2,058,000, which is beyond the reach of most Vancouverites due to their income.

Table of Contents show

1. Average home price in Vancouver
2. Housing Prices in West Vancouver

Key Takeaway

Vancouver households need at least $253,000 to afford an average home, according to various sources, including the National Bank of Canada. Living at home and cooking can help Vancouver residents afford homes. Low-income programs exist. Despite its affordability, Vancouver is a great place to live. Unfortunately, this makes it one of the most expensive cities in Canada. Even middle-class families with incomes of less than $80,000 struggle to buy a home in Vancouver.

According to the Demographia International Housing Affordability Survey, Vancouver is the second-most unaffordable place in the world when it comes to homes for sale in Vancouver. That’s a bummer for everyone who wants to buy a house in this city.

The real estate board displays record numbers every year. Banks rely on a very high credit score since Vancouver is a popular city with low housing affordability, even lower than the ones in Toronto, which was considered a real problem for a long time. Now some of the biggest unaffordable locations in Canada are the West side, West Vancouver homes for sale and North Vancouver homes for sale.

Vancouver is well-known for having a uniquely picturesque location, breathtaking luxurious houses, excellent schools, and peaceful neighborhoods that bring only joy to its inhabitants. If you want to buy your dream house in Vancouver, you have to take a close look at the home prices, which often require a mortgage payment calculator and a lot of data research. However, the good thing is that people nowadays can obtain this information through means like a quick google search and social media.

Can I afford a home in Vancouver BC? — Vancouver city night view with buildings.

Average home price in Vancouver

Following the real estate boards, Canada’s average home costs are at around $633,000, which requires a high income. Taking that into consideration, the housing prices in Vancouver, BC, are almost double at $1,100,000. Vancouver’s home price is a piece of information that always shakes the real estate board followers, calling for action. Such data tends to be avoided when it comes to advertisement in order to not intimidate people who are willing to make investments. However, this is not the case, as plenty of rich folks prefer moving to Vancouver.

Vancouver, BC is undoubtedly one of the most beautiful cities to live in, that statement being admitted by the Canadian Real Estate Association. It can often be a challenge for people who have a tight budget to reach the home prices’ income for a standard single-family detached home there. No question asked; Vancouver has a relatively low median household income than some other areas in Canada. That may be a reason why the local real estate market attracts mostly foreign buyers with a higher credit score.

The average down payment of $300,000 for one of the city’s luxurious houses is equal to the cost of an entire home in some of the affordable places in Canada, which is mind-blowing for an ordinary citizen. A real estate agent appears to be mandatory in the Vancouver real estate market experience. Real estate agents may be the only ones to have more tips for this particular task and to know how to navigate the landscape, include purchase tax and property taxes correctly.

About $250,000 Canadian dollars represent the income required for a 3,00 square foot home in a new-built property in the province, further from the Downtown Core. Contacting a realtor to negotiate the house price is often mandatory.

Housing Prices in West Vancouver

In West Vancouver, a property included in Metro Vancouver is among the most expensive region globally, including Maple Ridge. This area is also known as Greater Vancouver, and it is used to refer only to the urban and suburban regions.

This particular region brings luxury even into the average home. This area’s standard home price is estimated to $2,914,000, making the average down payment to be at around $582,800.

On the housing market, the average down payment is almost twice the average down payment of the houses in Vancouver. This way, the house price in Metro Vancouver makes it almost impossible for younger people to afford a home. Even though not many people can afford a home here, many of them come to visit. Making a purchase in West Vancouver is probably the biggest financial commitment of your life, which can even require lawyers, so a realtor is recommended in advance.

Comparing mortgage rates from different providers is the best thing you can do to achieve a lower mortgage payment and to have a positive experience in this domain. On a $500,000 mortgage with a 25-year amortization, paying 2.50 percent instead of 3.0 percent could save around $126 a month. Overall, the price would be $11,767 less in interest over a 5-year term.

Home Prices in North Vancouver

North Vancouver is the smallest out of the three North Shore municipalities and the most urbanized as well. When buying a home in Vancouver, based on benchmark price, a more affordable price can be found in North Vancouver, where the housing prices seem to be lower than in the North Shore of Metro Vancouver, especially compared to West Vancouver. You can often get bigger lot sizes in North Van.

The current MLS report states that in the month of January 2021, the average home price of 1,348,438 Canadian dollars per square meter was available on the real estate market in the downtown core. The option of getting a mortgage in North Vancouver tips between 2% and the 4.50% mortgage rate, being pretty similar to the West Shore data.

All of these make the process of buying a house harder for home buyers due to the insufficient household income and the huge prices displayed on the Canadian real estate market. Therefore, the real estate board is a little confusing for most Canadians who are looking to buy a house in North Vancouver and to have their dream home ownership. Given the fact that the average household income is one of $84,850, that home ownership seems indeed like a dream on the ‘real estate board of wishes’.

Besides the financial requests, a lot of citizens actually start savings accounts because they want to be able to purchase the residence they and their families desire. This is a great example of the modern sacrifices humans make in order to achieve their ideal state of comfort and happiness. Overall, Vancouver residents seem to be happy since they live in one of the best cities in the world, according to Resonance Consultancy’s World Best Cities Report of 2021. This statement was made based on prosperity, job offers, city aesthetics, promotions, money, and so on.

The Real Estate Housing Market and Property Tax

With such a report of big home prices in Vancouver, people often expect to pay an exorbitant property tax. Fortunately, the property tax is not as expensive as they assume. In fact, it is considered to be the lowest sum of money to be paid in North America. The price is $2.56 per $1000 in the assessed value of the owned house. That data would sum up to no more than 0.26 per cent of the property’s value.

However, the government is constantly trying to make the houses in Vancouver a bit more affordable to avoid shocks and make people more aware and understanding of the household income. Vancouver’s affordability crisis is a fundamental matter in the real estate market since the prices have been increasing at an alarming rate, creating a real challenge for a realtor – even in the Fraser Valley. Everything had changed for the better since 2018, when the prices went down a bit and the income increased. Home prices have dropped by almost $100,000 in the last couple of years. Now in this new decade a new secular bull market has only just begun.

Statistics Canada Provides Info About Taxes and Neighbourhoods

While the city still remains a perfect ground for both immigrants and foreign buyers, more and more locals are starting to find their way to affordable property through a realtor as soon as they have a good household income. Previously, only the immigrants from such states as China and Iran used to be able to buy houses here – especially in the richer parts.

The introduction of the first-time Home Buyer Incentive is auspicious for Vancouver residents. It allows first-time Canadian home buyers to have the advantage of a payment-free and interest-free loan, along with funding from the Canadian Mortgage and Housing Corp. This offer is valid only on the down payment of somebody’s first house. Moreover, the offer stands for 5% of the purchase price of any resale home and for 10% of the presale or new-built homes’ price. Such offers can be obtained via email or a certain realtor’s website.

Those who are eligible should have a pre-tax income of $12,000 per year at most, as stated on the website. They should also be able to support the minimum down payment of the insured mortgage with the Canadian Guaranty, Genworth, or CMHC. The loan awarded plus the buyer’s mortgage should not be more than four times their annual income, which prevents income gaps.

This loan is presented as being completely interest-free and without the necessity of making any monthly payments. More information should be obtained through communication, or maybe even by sending an email. The equity uplift, along with the loan, is repayable to the government by selling the house or by waiting at least 25 years, depending on whichever would happen sooner.

The government initiatives have had such a positive impact on Vancouver’s affordability, that things seem to take a turn for the better. Even more exciting was the income increase. A reduction as small as $100,000 in price is good news for a lot of citizens as it also brings a reduction in the down payment, and thus the income required.

Vancouver is YOUR Place, as long as you have the income…

Feeling discouraged may be a problem if you target your dream existence in Vancouver and you do not have the necessary income, but it is definitely worth it. Vancouver is believed to be an area of the top five cities for livability and quality of life, being ranked among the top ten best-living cities in the world for ten consecutive years. Want to bring a new family member into the world? Then Vancouver is certainly a safe, clean, place filled with opportunities!

Your ideal life is really close, don’t let the income be the disadvantage! Consider it a long-term investment (especially if commercial property) that will ultimately bring many benefits that far outweigh the spent cash in the end. People often think about most things in the short term, don’t let yourself be on that side of the bargaining table with life! Contact Strawhomes – all rights reserved, and let’s take a look at your dream house!

If you cannot indulge on a home, why not try for Vancouver condos for sale? Perhaps you can try the west side or even close to the North Shore like North Vancouver condos for sale?

Sources:

https://www.rebgv.org/market-watch/monthly-market-report.html

https://vancouversun.com/homes/buying-selling/vancouver-real-estate-7-most-expensive-condos-for-sale

Ready to turn your real estate dreams into reality? Contact Richard Morrison, Vancouver’s top realtor with 20+ years of experience. As a Medallion Club member and RE/MAX Hall of Fame award winning agent, he’s the expert you need on your side. Whether buying, selling, or investing, Richard’s personalized approach and deep market insights ensure a successful transaction. Reach out to Richard today at (778) 900-2235 and make your real estate journey seamless and rewarding.

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Can I actually afford a home in Vancouver?

Key Takeaway

Average home price in Vancouver

Housing Prices in West Vancouver

Home Prices in North Vancouver

The Real Estate Housing Market and Property Tax

Statistics Canada Provides Info About Taxes and Neighbourhoods

Vancouver is YOUR Place, as long as you have the income…

Lets Have a Smart Conversation.

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