Minimum income needed to buy a home in Vancouver rises due to interest rates

Homes are pictured in Vancouver, Tuesday, April 16, 2019. THE CANADIAN PRESS/Jonathan Hayward

The minimum annual income needed to buy a home in Vancouver inched closer to $250,000 last month, according to an online mortgage brokerage.

Ratehub.ca publishes a monthly report calculating the amount using average home prices, mortgage rates and stress-test rates. In August, a person or household would need to make $246,100 to purchase a house in Vancouver.

The increase, according to Ratehub.ca, is due to interest rates and came despite a small dip in the average home price.

"As in previous months, housing affordability deteriorated by the largest extent in Vancouver," says James Laird, co-CEO of Ratehub.ca, in a news release.

"In Vancouver, despite the average home price decreasing by $2,300, affordability worsened due to the rise in mortgage rates, with $1,480 in additional income required to purchase a home.”

The list compares major markets across Canada and Vancouver earned the dubious distinction of having the highest average home price at $1,208,400.

According to 2021 census data, the median income for an individual in the city was $42,000. For a household it was $82,000. About one in five households have an income of $150,000 or more per year.

Vancouver also has one of the highest rankings in the country on the Gini index, which measures income inequality. Sixteen per cent of people in Vancouver have incomes among the top 10 per cent in Canada while 15 per cent have incomes in the bottom 10 per cent.