B.C. households spending highest proportion of income on shelter

Proportion of Canadians with mortgages at 25-year high

By Gillian Shaw, Vancouver Sun

Published: Wednesday, June 04, 2008

VANCOUVER -- The percentage of Canadian homeowners who have a mortgage is at a 25-year high with almost six out of every 10 homes mortgaged, according to Statistics Canada's housing and shelter costs report released Wednesday.

At the same time, Canada's home ownership rate is at its highest level since 1971, with more than two-thirds of Canada's 12.4 million households owning their home.

In British Columbia the 57.6 percent of owners who have a mortgage is close to the national average of 57.9 per cent, but the financially beleaguered BC residents have the highest percentage of households shelling out more than 30 per cent of their income on shelter.

Among all households almost 29 per cent of British Columbians are spending more than 30 per cent of their income keeping a roof over their head, according to statistics compiled from the 2006 census. Nationally, 24.9 per cent of households were in that category.

B.C. renters fare the worst at 44 per cent, while 22.8 per cent of B.C. homeowners, up from 20.7 per cent in the 2001 census are spending more than 30 per cent of their income on shelter costs that include mortgage payments, property taxes, condominium fees and utilities.

The B.C. numbers outstrip the national average of 24.9 per cent by a wide margin and are higher than five years ago when 28.6 per cent of households in B.C. spent 30 per cent or more of their income on shelter.

Vancouver came second only to Toronto in the proportion of households spending 30 per cent or more of their income on shelter among census metropolitan areas.

Not surprisingly for a province that in its most recent real estate stats found the average price of a detached house in Greater Vancouver to be $771,250, B.C.'s metropolitan areas rank as the condo leaders in Canada.

Condo ownership accounted for 31 per cent all home ownership in Vancouver in 2006, for 23.8 per cent in Abbotsford, 21.2 per cent in Victoria and 21.1 per cent in Kelowna.

Condos also saw the largest increase across Canada of owners spending 30 per cent or more of their income on shelter. In 2006, 37.5 per cent of condo owners spent 30 per cent or more compared to 32.3 per cent five years earlier.

The dream of burning the mortgage appears to be a more elusive one for Canadian owners with the percentage of mortgage-free owners declining between 2001 and 2006, bucking an expectation that aging baby boomers would be paying off their mortgages by now.

"The share of owner households with mortgages has not been at such a high level in Canada since 1981," the report said. "This was when baby boomers were entering the housing market. With the aging of the population and with baby boomers entering their 60s, when mortgages traditionally are paid off, the percentage of households with mortgages could be expected to decline and the percentage that are mortgage-free could be expected to rise. "Instead, the reverse occurred between 2001 and 2006."

The report suggested most of the increase in the proportion of mortgage holders could be explained by renters buying, with some of the increase due to homeowners taking on new mortgages or adding to existing ones, perhaps to finance renovations or other large purchases.

Another factor could be couples breaking up and creating the need to purchase a second residence or two smaller or less expensive ones.