According to the apartment rental website Zumper the average rent for a one bedroom in Vancouver, B.C. right now is around $2,000 per month.
The B.C. minimum wage is $15.20 per hour and the median wage in B.C. only a few years ago had been around $1,156.10 for the full-time average earner on a weekly basis. Full time employees around B.C. see an average wage of $29.34 and millions of British Columbians spend more than 30 percent of their income on just their housing costs.
Paying Over 30% on Rent
With those millions paying over 30% on rent that means they have little left to afford other goods and services. They are continually feeling the pinch. One recent survey in Nanaimo found that roughly 4 out of 5 tenants are spending more than that 30% of their income on rent costs alone.
No that long ago in B.C. it was seen that about 43% of those in the province were spending more than 30% on rent. The average rent in Vancouver and other B.C. communities is too expensive for many full-time workers.
This is an issue that people are waiting to see a solution arise to but the government hasn’t implemented any long-term solutions that have significantly impacted the market or cost of living in this region yet. The vacant tax for example that was passed not that long ago hasn’t cooled off the problem.
Are Canadian Houses Too Expensive?
We know that there are concerns over the average rent in Vancouver and the Metro Vancouver region, everything seems to be getting more expensive. We see the same with home ownership, an arguably worse situation.
While there are millions of Canadians who own homes and want to see those prices rise, there are millions of others who are aggressively being priced out of the market and out of the dream of home ownership.
The issue of rent in Vancouver and around B.C., as well as home ownership in general, is an issue that doesn’t face B.C. alone or the Vancouver region. It is widespread in other areas too like the United States for example, where the rent in cities all over the U.S. today is too expensive for full time minimum wage earners.
With the housing prices what they are today it has fueled growing concerns with the public. We have seen calls for higher interest rates from some, to other possible legislative solutions being considered, promises of more home creation and funding for those who need shelter etc.
The longer that the situation goes unaddressed and the more that the average Canadian gets squeezed out of a decent standard of living then the more this situation will get worse and become even more political.
Just Need To Work Harder?
Due to the worsening problem in Canadian real estate prices, specifically for areas like Vancouver and Toronto, many Canadians have already given up on the dream of home ownership. And it isn’t as simple as they aren’t working hard enough to get what they want. Some cannot save as quickly as those prices are climbing, so it isn’t surprising that they might eventually ask, what’s the point?
The climbing housing prices are causing understanble psychological harm for Canadians who are stressed about whether they can afford to have a family or continue to live in their hometown. If representatives aren’t fully aware of the struggles that Canadians are facing on this front then their out of touch understanding is going to hinder them in bringing a potential solution to the problem.
13 to 1
Back in the 1970s it is estimated that the ratio of housing prices to median wages was 3 to 1 in the Metro Vancouver B.C. area. This has changed drastically though, along with more barriers to entry for the market. In 2016 the ratio has increased to 13 to 1 for housing prices.
As far as the average Canadian affording a home it is estimated by the National Bank of Canada that the average income needed would be over $127k to afford a condo in the Vancouver region. This is 1.6x the median income for the area. Many of the people who live and work in the Metro Vancouver region are increasingly finding themselves being priced out.
Thousands of British Columbians are moving away from Metro Vancouver each year to other areas, which means more are fleeing than they are coming here from elsewhere.
With the average rent in Vancouver being $2k for a 1 bedroom this means that more low income earners are going to have to make cuts to afford their shelter costs or look to move outside of the city. As things continue to get more expensive we can expect to see more Canadians choosing to move out of the Vancouver region because of that high cost of living. The housing in Vancouver for many is simply too unaffordable and housing prices are arguably highly overvalued around the province and country.
Will this be the housing bubble that goes on forever? And if it does then what will that mean for your average Canadian? What political policy changes might this also prompt in the future with millions struggling to afford shelter alone? For many today the housing prices in Canada right now are simply ridiculous yet we continue to hear of them going even higher.
Categories: real estate