According to the latest Vancouver real estate news, home ownership costs in this city are perhaps going way beyond what residents can afford. It’s becoming evident that incomes in Vancouver and many other cities in Canada may not be sufficient for the costs of mortgage payments, along with property taxes and utility expenses.
Experts from Canada’s Mortgage and Housing Commission insist that your housing costs shouldn’t go past 30% of your monthly income. This gives you some leeway so you can make payments, while you also meeting other required payments and expenses. You can then spend the rest of your money on food, car payments, insurance, clothes, and entertainment. Some part of the money can also be set aside for savings.
Huge Income Percentages for Home Ownership
The problem is that in Canada, the average percentage of income people spend on housing expenses is at 45.9%. It’s bad enough that on average people spend half their paycheck on housing, but in some cities, it’s much worse.
Vancouver tops the list for the largest income percentage spent on housing. For the 1st quarter of 2017, it was at 79.7%. More astonishingly, it’s that this percentage was an improvement from the year before. During the 3rd quarter of 2016, people in Vancouver spent 92% of their income on home ownership costs!
The Greater Toronto Area is close behind at 72% of a person’s household income. Montreal follows with 43%, along with Calgary (39.6%), Ottawa (34.8%), and Quebec City (34.2%).
Where are the More Accessible Cities?
So if you don’t want to spend too much of your income on your housing costs, where should you go?
If you still insist on living in a more urban area, the best place is Saint John, where the average home prices are $219K. There the residents spend only 26% of their income on housing.
Another great option is St. John’s, where the percentage of the income for housing is at 28.6%. Here the average home price is about $328K. Another good choice is Regina, where the average home price is $335K. People here use up 29.1% of their income on housing.
You can try Winnipeg, as the home price average is quite affordable at $279K. So it’s not surprising that people here spend just 30.4% of their income on mortgage and other related payments.
On the other hand, you may also want to consider Edmonton. People only set aside 31% of their income on housing expenses here. However, average home prices are at $382K.
Quick Saving Tips
While you can pay more for your mortgage each year to eventually pay off your montage early, that can be a problem if you’re already setting aside too much of your income on housing. Instead, you need to think of simple ways to save, just to make sure you can cover all your housing expenses.
So here are a few quick tips:
Record all your expenses. This will give you an idea of where all your money is going.
Quite smoking! It’s an expensive habit, and you’ll increase your medical bills eventually.
Stop collecting stuff, and perhaps think about selling your collections.
You don’t have to avoid your friends to save money. Instead, invite them over. It’s much better than eating out, as that can get expensive.
Don’t just toss away your clothes. See if you can mend them first.
Patronize yard sales. If you need to buy from a mall or a shop, look for sales and discounts.
The cost of home ownership can be rather higher, so you need to be financially savvy. You can save money, but you should make sure you only buy a house you can afford!