Coquitlam was the seventh most “cost-burdened” city in Canada in 2020, according to a recent study that measured the percentage of household income homeowners used to pay off their mortgages.
The report, conducted by the real estate date company Point2, found Coquitlam homeowners spent an average of 38.5% of their income on mortgage, meaning an average household would need to earn an extra $32,845 (33%) more to dip below the recommended 30% income-mortgage threshold. And that’s with median household incomes standing at $100,408.
Beyond Coquitlam, the share of household income needed to afford housing “has gone up exponentially” over the last decade.
In 2010, six cities were on Canada’s mortgage burdened list, defined as cities where mortgages make up more than 30% of a homeowners’ income. At the time, Coquitlam took the unenviable top spot with mortgages making up 40% of homeowners income, according to study.
Ten years later, several other cities in British Columbia have joined Coquitlam in the “markedly unaffordable territory.”
They include Burnaby, where 44.7% of residents’ income was found to go toward their mortgage in 2020, as well as Richmond (44%), Vancouver (41.6%), Kelowna (40.8%) and Langley (40.5%).
The study found seven out of the 10 most cost-burdened cities were in B.C., and Ontario was the only other province to have cities fall within the top 16 most unaffordable markets.
Across Canada, Halifax — where roughly 11% of median household income went to mortgage fees — was found to be the most affordable city of the 50 included in the study.
The good news? Coquitlam was the only city in the unaffordable list where household incomes went up at a faster rate than home prices.
Population data for the study was drawn from the 2016 census.
Real median household income after tax came from both the Canada Mortgage and Housing Corporation and a national income survey conducted by Statistics Canada.
In Coquitlam, Point2 set 2020 median household income at $100,408, with an average Coquitlam detached home calculated at $902,337, according to local median sale prices. That’s substantially lower than BC Assessment’s typical assessed value for a detached home in Coquitlam, which in 2020 was $1,187,000.
RENTERS STILL SQUEEZED DESPITE HIGH VACANCY
The mortgage study comes as the Canada Mortgage and Housing Corporation released its annual rental market report Thursday, where it defines an “affordable” housing situation as one where a person or household spends less than 30% of their income on rent.
The report found the overall vacancy rate in the Metro Vancouver region for purpose-built rental apartments increased from 1.1% in October 2019 to 2.6% in October 2020, the highest increase since 1999.
But the report also found significant regional differences in rental vacancy rates: whereas newer structures and those in central areas generally saw larger increases in vacancy rates, vacancy rates decreased in suburban markets with lower rents.
“These regional differences in the vacancy rate are consistent with the findings in other large Canadian centres such as Toronto and Montreal, where demand has shifted away from downtown cores to more outlying areas and neighbouring cities,” the report said.
The report notes the challenges that still face renters, noting only 0.2% of rental stock in the Metro region would be affordable to households earning $25,000 or less per year. Households earning $47,000 or less per year could afford 23.9% of what’s available on the market, said the report.
“While the overall rental market loosened somewhat in 2020, these results reinforce that significant imbalances and pressures remain, particularly for lower income renter households,” the report said.
— With files from Mike Howell