Metro Vancouver’s housing market worsens, now pricing out even high earners: report

Getting into Metro Vancouver’s pricey real estate market is becoming increasingly challenging for young people and singles.

Getting into British Columbia’s pricey real estate market is becoming increasingly challenging for young people and singles.

As home prices continue to climb, even some high-income households are struggling to secure homeownership.

Vancity’s January Economy and Impact report is reinforcing the belief that for many Metro Vancouverites, the dream of owning a home feels increasingly out of reach. The credit union says one of the biggest issues for singles and younger buyers is housing costs outpacing income growth.

Since 2018, the average monthly household income of home-buying Vancity members increased by 27 per cent, reaching $13,300 in 2024. However, monthly mortgage payments surged more than 50 per cent, climbing to $3,400.

“These figures show that only households with substantial incomes can consider entering the housing market in Vancouver, even when they have two incomes. For those relying on a single paycheck, the income required to purchase and maintain a home in the region is likely very challenging,” reads the report.

The report says benchmark prices for detached houses in Metro Vancouver are now just over $2 million and condos averaging $757,000.

There’s also a significant generational gap. The average monthly income of Vancity mortgage-holders aged 43-58 is $14,400. That’s compared to $11,800 for buyers aged 19-30, highlighting a stark income disparity between younger and older buyers.

“On top of never-before-seen purchase prices, recent interest rate fluctuations are adding uncertainty and expense for mortgage-holders,” reads the report.

Vancity says when rates were at their lowest in 2021, many people opted for variable rate mortgages. In February 2022, before rates started rising, variable rate mortgage-holders were paying an average of $2,230 per month.

Interest rates then climbed steadily between March 2022 to July 2023. Variable rate mortgages saw their monthly payments rise to an average of $3,550—a 59 per cent increase—by September 2024.

For those who had mortgaged a newly purchased home, the average monthly payment rose from $2,660 to $4,425—a 66 per cent spike.

Vancity says the average down payment for a single detached house in the heart of Vancouver was $840,000 in 2024. In the suburbs it was $497,800, and in the Fraser Valley, it was $291,400.

The average down payment for buyers aged 19-42 in 2024 was $287,300, a 37 per cent increase from 2018. For first-time buyers, the average down payment rose by 20%, reaching $179,000 in 2024.

Vancity says the data signals a dependence on family wealth.

According to Statistics Canada data, more than 20 per cent of residential properties owned by people born in the 1990s were co-owned with their parents. The report says that is fueling the growth of so-called “inheritocracy,” where family wealth plays a significant role in accessing homeownership.

Canadians are being forced to find creative solutions to address rising housing costs.

Approximately 24 per cent of all Vancity mortgage-holders are generating rental income from the home they live in to generate additional income.

In late 2022, more than half of Vancity members extended their mortgage amortization, a significant increase from less than 20 per cent in 2018.

Vancity says that was likely in an effort to ease short-term financial strain.

Twenty-five-year amortizations are typically the standard for the purchase of new homes, but recent federal policy changes now allow more home-buyers to qualify for 30-year mortgages.

Vancouver remains the most expensive rental market in the country, with the average cost of a one-bedroom apartment at $2,534 per month.

Although rent has dropped by 12 per cent over the past year, affordability remains a significant challenge for renters.

“Since the pandemic, the rate for a one-bedroom Vancouver apartment is up by 38 per cent. The average home purchase price in the Lower Mainland was 31 per cent higher in November 2024 than in January 2018,” reads the report.

Twenty-one per cent of renters surveyed said they could not cover an unexpected $5,000 expense.

Only five per cent of mortgage-holders said the same thing. The credit union says that’s because those who own a property can use a home equity line of credit to cover a surprise expense.

Vancity says although becoming a homeowner is often seen as the gold standard for financial success, there are other ways to create financial stability for yourself.

“Investing may be a good option for those who choose not to buy in this expensive market, as the stock market has typically rewarded long term-investors,” it wrote.

It also suggested looking into alternatives to buying like housing co-operatives, a type of non-market housing that focuses on creating a space for living, not investing.

Methodology: The data used in this report is from Vancity mortgage accounts, primarily from opening or renewal events dated January 2018 to December 2024 inclusive, which reflect the mortgage conditions at that time. Data on down payments, property usage, and mortgage holder income is collected in the mortgage application process at the time of purchase. Age data reflects the primary account holder. Data on variable rate payments is from mortgages that were opened or renewed in the lowrate period of July 2021 to March 2022, for which terms were not altered up to September 2024. The Financial Health and Inclusion survey was completed in March 2024 by 1,435 retail Vancity members from across a range of housing tenures, ages and income brackets. It is assumed to be representative of Vancity’s membership though not necessarily the B.C. population.