It’s not uncommon to hear about people working extra jobs to make their rent.
A Canada Mortage and Housing Corporation report calculates how much more hours an individual has to do over full-time employment to keep rent affordable.
By affordable, the CMHC explains that it’s a dwelling where a renter household spends no more than 30 percent of gross income on rent.
Full-time work is 37.5 hours per week or 150 hours a month.
CMHC’s calculation also assumes that an individual is earning the average wage in their respective urban centre, and lives in a two-bedroom apartment.
Hence, metropolitan areas in Canada that show more than 150 hours required for the 30 percent affordability measure “implies that the average rent is not affordable for a single average wage earner without another source of income, even if they work full time”.
Guess which urban centre topped CMHC’s list of unaffordable places?
It’s Metro Vancouver, with Victoria following second.
The CMHC list shows that residents in Greater Vancouver have to work a total of 198 hours per month to keep their rental cost affordable or at the 30 percent mark.
This means doing 48 hours more over the full-time employment of 150 hours.
In Victoria, it’s 162.6 hours per month.
In its report, CMHC noted that major urban centres in B.C. and Ontario are “above 150 hours, indicating significant rental affordability challenges in these markets”.
The agency noted that data in its report indicates that “rent growth has exceeded wage growth” in most urban centres in the country.
As for Metro Vancouver, CMHC stated that “lower-income households face significant challenges in finding units that they can afford”.
For instance, less than one-fourth or 25 percent of purpose-built market rental units are affordable to households earning less than $48,000 in annual income.
A yearly income of $48,000 means that with a 30 percent affordability measure, a household’s rent should be $1,200 per month.
Moreover, CMHC reported that only one in 1,000 units in Metro Vancouver is affordable to households with the lowest incomes.
“Most of the lowest-priced units are small and unsuitable for families,” CMHC noted.
The CMHC report was released in February 2022, and is based on data as of October 2021.
The agency reported that the average rent for a two-bedroom unit in a purpose-built rental building in Metro Vancouver is $1,824 per month as of last fall.
This means that rent in the region increased by 2.4 percent compared to October 2020.
Vancouver real estate company rennie took a look at the housing agency’s report, and highlighted a number of points.
In its own report, rennie noted that Metro Vancouver continues to have the lowest purpose-built rental vacancy rate among major Canadian markets at 1.2 percent.
The national vacancy rate is 3.1 percent.
The 2021 vacancy rate of 1.2 percent in Metro Vancouver represents a tightening from the previous 2.6 percent in 2020.
“The return of international students, elevated immigration flows, and robust domestic in-migration each played a role in the market’s tightening,” rennie stated in its report.
The Vancouver real estate company also noted that while rental rates were frozen for existing tenants, rates increased by 1.9 percent overall “due to both the turnover of units and the addition of new units to the existing stock”.
And as the vacancy rate in Metro Vancouver fell, the average monthly rent increased by 1.9 percent between 2020 and 2021 to $1,537.
“The average rent for studios rose by 3.4% (driven by the chase for affordability), while that of three-bedroom homes rose by 5.4% (driven by the chase for space),” rennie reported.
For more details, see table below.