Huge disparity between wages, home prices
Metro Vancouver, one of the world’s more expensive housing markets, lags far behind other Canadian cities in wage earnings, according to the latest Statistics Canada figures.
The census stats, released Wednesday, underline a radical disconnect between local wages and skyrocketing home prices in Metro Vancouver, according to Simon Fraser University urban expert Andy Yan.
The median total income for households in Metro Vancouver was $72,662 (15th for census metropolitan regions across Canada) in 2015. By comparison, Calgary’s median total income was No. 1 in Canada at $99,583, while the median household income across Canada was $70,336.
Average housing costs for Canadian cities won’t be released by Statistics Canada until late October, but based on general knowledge of real estate trends across Canada, Yan said he can already draw conclusions on Vancouver’s housing affordability crisis.
“It was really surprising to me that we have the 15th-highest incomes in Metro Vancouver, even coming behind Toronto,” Yan said. “What we learned today is in Vancouver, you are living in paradise, but your wages are in purgatory.”
Yan said the new national income figures support the argument that speculation and certain amounts of foreign investment are driving home prices in Vancouver and Toronto especially, while other national housing markets are generally aligned with local job markets.
“No matter where you live in Canada you will have some element of globalization, but it is particularly acute in Vancouver,” Yan said. “The issue that urgently needs solving is to reconnect local incomes to local housing. But the difficulty is, you will need different policy for different cities.”
A comparison of Statistics Canada wage figures for 2015 with aggregate home prices (including detached, semi-detached and condominiums) for the first quarter of 2017 shows the challenges faced by Metro Vancouver wage earners.
For the city of Vancouver, the average home cost just over $1.4 million according to the Royal LePage National House Price composite. Median total household income in the city for 2015 was $65,327, the latest census showed. For the district of North Vancouver, median total income was $103,981 compared to an average home cost of just under $1.4 million. In the city of Richmond, the average house
cost was just over $1 million and median total income was $65,241.
In Surrey, the average home cost $764,000 and median total income was $77,494.
In Alberta, wage-earners have a much brighter picture. Royal LePage’s composite shows the average house in Calgary costs $460,000. That is not a big stretch for households bringing in a median total income of just under $100,000, Yan said. Edmonton, which has Canada’s second-highest median total income at $94,447, has an average home cost of $382,000.
In Saskatchewan, Regina and Saskatoon have similar income to house affordability ratios. And Ottawa in Ontario, and Montreal in Quebec, are only slightly less
affordable than the Prairie cities.
Only Greater Toronto — where the average home costs $759,000 and the median household total income is $78,373 — approaches Metro Vancouver’s skewed housing affordability.
Yan, who teaches urban planners to address issues like housing affordability in SFU’s community data science program, says that neighbourhood-level income statistics show that in some Metro Vancouver areas where home vacancy or speculative investing are believed to be especially acute problems, such as Coal Harbour and northwest Richmond, wages are even lower than comparable city-wide averages.