How much you need to earn to afford a home in Vancouver and the GVA
We break down the household income requirements for different property types and regions across Vancouver.
Your home sold—now what?
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The Canadian real estate market has been red-hot since the pandemic started in March 2020. Home prices have risen across the board, but they are especially high in Vancouver, Canada’s most expensive housing market.
If you’re looking to purchase a home in the Greater Vancouver Area (GVA), you may be wondering how much you can afford or how much you need to earn to make that happen. Given that the average price of a detached home is nearing $2 million, you will need to have a high household income. It will also help to have a game plan and to know where to look.
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To help make things easier for you, we’ve gone ahead and calculated the household income you’ll need in order to purchase a home across different parts of the GVA, based on the average prices in December 2021. (You may also want to check out how it compares with homes in the Greater Toronto Area, another expensive Canadian real estate market.)
Income needed by property type
First, we looked at the prices of different property types across the GVA, for all 21 regions listed in Real Estate Board of Greater Vancouver (REBGV) data.
There’s no denying the numbers are intimidating (just like the numbers in other hot markets, like Toronto). But it’s important to note these are averages only. It’s possible to find housing that’s more or less expensive than what’s listed here.
| Property type | Average price (across all regions) | Household income needed | Monthly mortgage payment |
|---|---|---|---|
| Detached | $1,910,200 | $320,000 | $7,000 |
| Townhouse | $1,004,900 | $170,000 | $3,780 |
| Apartment homes / condos | $761,800 | $130,000 | $2,790 |
How much you need to earn, based on region
Along with giving a basic overview of the GVA real estate market, we dug deeper into the numbers representing all property types (detached houses, townhouses and apartment homes) for each of the 21 regions listed in the data.
| Region | Average price (all property types) | Household income needed | Monthly mortgage payment |
|---|---|---|---|
| Bowen Island | $1,489,800 | $251,000 | $5,460 |
| Burnaby East | $1,127,600 | $191,000 | $4,130 |
| Burnaby North | $1,153,700 | $195,000 | $4,230 |
| Burnaby South | $1,079,000 | $183,000 | $3,950 |
| Coquitlam | $1,162,400 | $196,000 | $4,260 |
| Ladner | $1,103,500 | $187,000 | $4,040 |
| Lower Mainland | $1,234,600 | $208,000 | $4,520 |
| Maple Ridge | $1,102,000 | $186,000 | $4,040 |
| New Westminster | $752,900 | $128,000 | $2,760 |
| North Vancouver | $1,273,100 | $215,000 | $4,660 |
| Pitt Meadows | $1,000,000 | $169,000 | $3,660 |
| Port Coquitlam | $988,000 | $167,000 | $3,620 |
| Port Moody | $1,115,900 | $189,000 | $4,090 |
| Richmond | $1,132,600 | $191,000 | $4,150 |
| Squamish | $1,071,300 | $181,000 | $3,930 |
| Sunshine Coast | $854,500 | $145,000 | $3,130 |
| Tsawwassen | $1,231,000 | $208,000 | $4,510 |
| Vancouver East | $1,247,900 | $211,000 | $4,570 |
| Vancouver West | $1,385,400 | $233,000 | $5,070 |
| West Vancouver | $2,595,700 | $434,000 | $9,500 |
| Whistler | $1,369,400 | $231,000 | $5,020 |
Looking at area-specific data can be helpful when house hunting. That’s because you can focus your property search on the regions that you can more easily afford.
West Vancouver is by far the most expensive region. You’ll need around $434,000 in household income to buy the average property there. Meanwhile, New Westminster is the most affordable. You’ll only need about $128,000 in household income to buy the average property in that area.
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How we calculated what you need to earn to buy a home in Vancouver
If you have a mortgage pre-approval letter in hand, a mortgage professional has already put your finances to the test using the gross debt service (GDS) ratio. Your GDS is calculated by adding up all your expenses (mortgage payments, heating and taxes) and dividing that number by your entire household income.
If your GDS works out to be 39% or less, then the property falls within your price range, according to the Canada Mortgage and Housing Corporation (CMHC). Note that some lenders may limit you to a lower GDS ratio depending on your credit score.
If you have a GDS of less than 39%, there’s still another debt ratio you have to pass: the total debt service (TDS) ratio. TDS is a lot like GDS, except with one big difference—it adds any other debts you might have, such as a car loan or student debt, to your housing expenses, before dividing the total by your entire household income.
It’s an important calculation because it can impact how much you qualify to spend on a home. Most mortgage lenders let you have a TDS ratio of up to 44%—the maximum TDS allowed by the CMHC.
To calculate the household income needed to buy property in the GVA, we did a reverse calculation and applied the 39% GDS rule to average home prices in December 2021. The results are based on having a down payment of 20%—a requirement for homes priced at $1 million or more—and a benchmark interest rate of 5.25%, which accounts for the Canadian mortgage stress test. We assumed a 25-year amortization, estimated annual property taxes of 0.75% of the purchase price, $100 per month for heating and a five-year fixed mortgage rate of 2.69%.
Since we cannot take individual borrowers’ other debts into account, the TDS ratio was not factored into the calculations. When using the tables above as a guide, bear in mind that you may actually need a higher household income than what’s shown if you’re carrying a lot of debt or have a low credit score.
Closing thoughts
If you’re surprised by the average income needed to afford a home in Vancouver and the GVA today, remember that there are still options available for a variety of buyers with different household incomes.
Start by getting familiar with the ins and outs of the home-buying process. Then look at some of the most affordable areas, such as New Westminster and the Sunshine Coast, as well as the property types that may more easily fit your budget. In addition to sound financial planning, setting realistic expectations is important to achieving homeownership—and knowing how much you’ll likely need to earn to buy a home is a big part of that.
MORE ON REAL ESTATE
- A guide to mortgage calculators
- 7 smart strategies for first-time home buyers
- Why are homes selling for so much higher than the list price?
- Rethinking rentership: How to get ahead financially while renting
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Hi, the area encompassing the city of Vancouver has traditionally been called ‘Greater Vancouver’. We don’t call it the ‘GVA’ as Toronto does with the reference of GTA for the Toronto area. I was born in Vancouver and have lived here for my entire life and it has always been referred to as ‘Greater Vancouver’ or the GVRD in reference to the water and civic authority. Thought you would appreciate being corrected on that.
So Disheartening.. Looking at work b.c and what people earn anally, there is literately no way possible for the majority of millennials to buy a home in 2022 without family behind you helping financially…. I’m not sure how the CMHC continues without reassessing the home ownership situation in the lower mainland. Municipalities also disregarding illegal suites only making it easier for people to profit unlawfully.. Too much money laundering, using drug money to put into housing and profiting it cleaning up their money…
The increase in home pricing and rentals is extremely unrealistic.