Vancouver real estate: Prospects of buying a home at 'full-blown crisis levels,' report says

Vancouver homes in the Kitsilano neighbourhood of Vancouver are pictured Monday, October 3, 2022.THE CANADIAN PRESS/Jonathan Hayward

Those hoping to buy a home in Vancouver are facing a more challenging time than ever before, a new report from the Royal Bank of Canada suggests.

The report, released Tuesday, outlines home affordability across the country. With high interest rates, RBC says the fourth quarter of 2023 saw the "toughest time ever to afford a home." 

In Vancouver, that affordability problem was even more pronounced.

"The prospects for buying a home have long been challenging in the area," RBC's report says. "They’re now at full-blown crisis levels. It’s never been as expensive to own a home anywhere, anytime in Canada as it was in Vancouver in the fourth quarter."

According to RBC, 106.4 per cent of a median income was needed to cover ownership costs at the end of 2023, which the financial institution says "means that only a select few high-income earners can afford to buy—or that considerable wealth must be amassed (or received) to put down towards a purchase."

"This significantly narrows the potential pool of buyers in the market, keeping activity soft and prices flat recently," RBC's report says. "We see little change from this in the months ahead."

For those thinking of buying a home in Victoria, the situation wasn't much better as "extreme unaffordability pressures got even worse" at the end of last year, the report says.

But in that city, new listings are trending above pre-pandemic levels, which means prices may be on a "slight downward trajectory in the near term," according to RBC.

BC United used the report to slam the provincial government on social media saying that "under David Eby's NDP, B.C.'s housing crisis is simply getting worse."

But on Wednesday, Minster of Housing Ravi Kahlon said RBC's report "highlights what we already know," saying interest rates, global inflation and "decades of no investment in affordable housing" are to blame.

Kahlon said the NDP government is addressing the affordability crisis by increasing housing near transit hubs and improving density.

"If we could flip a switch and address all the housing crises overnight, we certainly would. But we know that addressing housing takes time and it requires real reforms to ensure that we can get housing built in a quick way," he said. "The biggest challenge we have right now is interest