More Vancouver residents are spending less on housing

Vancouver has long been known for its high housing costs, making it one of the least affordable cities in Canada. Prices have increased dramatically over the last few years, making home ownership even more difficult for many Vancouver residents.

But, new data released shows that there is a lower percentage of homeowners and renters spending more than 30% of their income on housing. 30% is considered the standard threshold for shelter costs regarding affordability. Within the city of Vancouver, approximately two-thirds of residents spend less than 30% on their housing needs, up 2.5% from 2016. In the Province of British Columbia, 74.5% of households spend less than 30% of their income on housing, which is 2.5% higher than in 2016.

Overall, home ownership in Vancouver is still more expensive than the Canadian average. The average cost of home ownership in Vancouver is $2084, substantially higher than the national average of $1498. It is, however, renters who are feeling the pinch more than buyers. Data shows that almost 40% of renters spend more than 30% of their income on housing costs, but only about 26% of homeowners spend 30% or more on shelter.

About 26% of renters are said to be in “core housing need.” The definition from Statistics Canada of core housing need is when “ a private household's housing falls below at least one of the indicator thresholds for housing adequacy, affordability or suitability, and would have to spend 30 per cent or more of its total before-tax income to pay the median rent of alternative local housing that is acceptable.”

The problem seems to be closely linked to supply and demand; according to Ron Rapp, CEO of the Homebuilders Association Vancouver (HAVAN), “Demand is far and away outstripping supply, and that’s affecting both rental – below-market and market housing,” The Canadian government is stepping in to try and assist with the skyrocketing rental prices. They recently announced a $500 top-up to the Canada Housing Benefit.

So, although the percentage of Canadians spending less than 30% on housing costs is increasing, many Canadians are still struggling to make ends meet, and rising inflation is not helping either. Still, if you can afford it, home ownership seems to be the better route to go. Especially with the price of homes rising substantially through the pandemic boom, those who were able to purchase homes saw substantial capital appreciation.