Households that earned around the median pre-tax income in Greater Vancouver last year spent 87.1% of their earnings on the cost of owning a home. That figure marked a sharp increase of 14.5 % from 2015.
“The deterioration of housing affordability in southern B.C. is discouraging potential homebuyers,” said Lori Mathison president and CEO of CPABC. “With the average worker earning less than $55,000 a year, it is difficult for individuals to become homeowners and maintain a decent lifestyle.
Mathison said measures have been taken to cool the real estate market over the past year. But the organization is still seeing a steady increase in real estate demand and prices, which will further impact southern B.C.’s livability.
Consumer debt in B.C. also rose in 2016, with mortgage loans comprises approximately three-quarters of consumer borrowing. Overall consumer debt per capita increased by 5% to $62,395, the highest level in Canada.
“In the absence of measures to dampen mortgage lending or manage consumer debt, British Columbians are especially vulnerable to sudden changes in their income,” continued Mathison. “Should interest rates go up or our economy see a reversal of fortunes, it will likely lead to an increase in the number of defaults and consumer insolvencies.”
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