VANCOUVER, British Columbia — According to the BC Check-Up, an annual economic report released by the Chartered Professional Accountants of British Columbia (CPABC), the quality of life in B.C. continues to be affected by high housing costs.
In 2017, households that earned around the median pre-tax income in Greater Vancouver put 80.6 per cent of their earnings towards the cost of owning a home, according to the RBC Housing Affordability Index. This was a 2.3 percentage point increase over the previous year. For those in Victoria, the situation is slightly better, but households earning around the median pre-tax income still spent close to 60 per cent of their earnings on their homes. With such high costs, owning a home in Greater Vancouver or Victoria was challenging and difficult for many, especially young families.
“Although housing prices have gone down so far in 2018 relative to the records we’ve seen in 2017, housing affordability continues to be an issue for British Columbians,” said Lori Mathison, FCPA, FCGA, LLB, president and CEO of CPABC. “With the average worker earning just over $55,000 a year, it is difficult for individuals to both be homeowners and maintain a decent lifestyle while carrying overwhelming debt.”
B.C. has the highest consumer debt in the country. Low interest rates and rising housing prices over the past several years have encouraged homebuyers to borrow more money. In fact, consumer debt per capita in B.C. reached $67,294 in 2017, according to the BC Check-Up report. This was an increase of 7.1 per cent from 2016, the biggest annual jump since 2009; and it was largely fueled by the housing market and rising interest rates. As a result, British Columbians are particularly vulnerable to sudden changes in their income.
“Despite signs of a cooler housing market, mortgage debt will likely remain a prime concern for British Columbians. Mortgages account for over three-quarters of consumer debt in the province. Should interest rates continue to go up or should our economy see a drastic reversal of its recent fortunes, it could possibly lead to an increase in the number of defaults and consumer insolvencies,” said Mathison.
Learn more about the BC Check-Up at www.bccheckup.com.