Burnaby named 'most mortgage-burdened' city in Canada

City's homeowners need to a high percentage of their income just to pay the mortgage

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Burnaby has landed on a dubious list as a new report labels it the “most mortgage-burdened” city in Canada.

The report is by Point2, which studies real estate trends, and it includes a list of the cities in which homeowners spent the highest percentage of their income on their mortgage.

Owners in Burnaby spend 44.7% of their income on mortgages, making them the most cost-burdened in Canada, said the report. In second is Richmond at 44% and in third is Oakville, Ont. at 43.8%. Homeowners in these three cities would need to earn an additional $50,000 to cover their mortgage stress-free, the report said.

“As our latest affordability study shows, the increase in income is no match for the surging home prices in the 50 most populous Canadian cities,” said the report. “And the disparity between galloping home prices and slower-moving incomes means that the number of unaffordable cities (where homeowners spend more than 30% of their income to cover the mortgage alone) is going up at an alarming rate.”

In Vancouver, the percentage of income spent on mortgages increased sharply since 2010, said the report, as wages could not keep up with surging home prices.

Here’s what the numbers show:

In 2020, homeowners in Vancouver spent 42% of their income on mortgages, compared to 30% in 2010, making them the fourth-most cost-burdened in Canada;

Home prices in Vancouver increased by 78% in the last decade, while wages grew by just 28.9% in the same time-frame;

Homebuyers in Vancouver should earn $45,865 (43%) more than they currently do, to relieve the financial pressure and keep their mortgages just under 30%;

The other cities in Metro Vancouver where mortgages take up more than 30% of owners’ income are Langley (40.5%), Coquitlam (38.5%), and Surrey (32.2%).

In the past decade, mortgage affordability worsened in 38 of the 50 largest Canadian real estate markets.

The number of unaffordable markets jumped from six to 16 in the last 10 years.

Income increase is no match for home price growth: In 18 cities, home prices increased between 100% and 148%, whereas the most significant income gain was 53% in Edmonton, AB.

Since 2010, the benchmark composite price crossed the $1 million mark in four cities: Richmond, Burnaby and Vancouver, BC and Oakville, ON.

At the other end of the spectrum, in the three most affordable cities (Halifax, NS; Windsor, ON; London, ON) mortgages take up a little more than 10% of owners’ income.