Vancouver Cost of Living Remains High

Vancouver skyline | BCBusiness

Two studies out this week paint a picture of a city and a province living beyond its means

While the RBC Economics Research study, released Monday, indicated that B.C.’s housing affordability had improved in the third quarter of 2013, the Vancouver market in particular remains Canada’s priciest city in which to live and own. According to RBC—which defines housing affordability as the percentage of pre-tax household income needed to service the costs of owning a home at market values—Vancouver scores an 81.6 per cent, down 2.3 percentage points from the previous quarter.
Toronto, by comparison—the next most expensive market—scored a 55.6 percent (up 0.1 percentage points); Montreal, 38.8 (unchanged); Ottawa, 36.7 (down 0.4 percentage points); and Calgary, 33.8 (down 0.2 percentage points).
“If it is possible to take some comfort from the earlier housing market slump, it would be in noting that it contributed to some improvement in Vancouver’s very poor affordability levels,” said Craig Wright, senior vice-president and chief economist of RBC. “Still, housing affordability remains uncomfortably stretched and this is likely perpetuating market stress in the area.”
The other report, released by credit monitoring agency TransUnion on Tuesday, detailed how the average consumer’s total debt levels (excluding mortgage) decreased between the fourth quarter of 2013 and the fourth quarter of 2012 in all of Canada’s major cities—all except Vancouver. In Vancouver, average consumer debt spiked from $38,357 to $41,077 on a year-over-year basis.
“It’s encouraging to see drops in debt for most of the major markets in Canada,” said Tom Higgins, TransUnion’s vice president of analytics and decisioning services. “Vancouver is an outlier in this scenario, but it should be noted that their unemployment rate—a major driver in consumer spending—is much lower than what is observed in other larger cities such as Toronto and Montreal.”
And so it is that we’re driven to spend—on mortgages, on credit cards—with money that we don’t really have. The virtual West Coast life continues unabated.