Share of Average Family After-Tax Income Needed for a Monthly Mortgage Payment in BC’s Census Metropolitan Areas over 100,000 population in 2023
BRITISH COLUMBIA – To buy a typical home, British Columbia families earning the local median income would have to devote more than 60 per cent of their after-tax earnings to monthly mortgage payments in BC’s six largest cities—and over 110% in Vancouver—according to a new report published today by the Fraser Institute, an independent, non-partisan Canadian public policy think-tank.
“There is a perception that housing outside of Vancouver is still somewhat affordable for BC families, but that’s not true. Even in cities like Chilliwack and Kamloops, buying a typical home would require a family earning the local median income to spend more than 60 per cent of its after-tax earnings on mortgage payments,” said Austin Thompson, senior policy analyst with the Fraser Institute, and co-author of Home Ownership and Rent Affordability in Canadian CMAs, 2014-2023.
The study finds that, in BC’s six largest cities, the monthly mortgage payment required to buy a typical home ranged between 61.3 per cent (Kamloops) and 112.3 per cent (Vancouver) of the local median after-tax family income (comparable data is not available for Nanaimo). That is after a 20 per cent down payment on the home purchase.
This has increased since 2014, when the share of median after-tax family income needed for the mortgage payment on a typical home ranged from 31.4 per cent (Chilliwack) to 73.9 per cent (Vancouver).
When thinking about housing affordability, one needs to assess both income and home prices. Crucially, while house prices have increased, BC worker salaries have largely stagnated over this ten-year period, which has also contributed to the increase.
“Housing affordability is both a function of home prices and incomes, and as wages and incomes have flatlined across BC in recent years, that has exacerbated the housing unaffordability crisis,” said Steven Globerman, Fraser Institute senior fellow and study co-author.
“In order to make housing more affordable for British Columbian families, policymakers should focus on increasing wages and incomes as part of the solution.”
Austin Thompson is a senior policy analyst with the Fraser Institute & Steven Globerman, Fraser Institute senior fellow
