'It's ridiculous': Annual income of $177,000 needed to afford to buy a home in Victoria

The cost of a home in the B.C. capital region is rising again.

Between May and June, the average Victoria home price on the Canadian Real Estate Association price index rose by $6,500, according to James Laird, co-CEO of Ratehub.ca.

A new report from Ratehub.ca shows increasing interest rates has done little to slow down the spring housing market, actually adding to the affordability crisis.

“Interest rates have gone up, which means that you need more income in Victoria to qualify for any home, including the average home,” said Laird.

A family now needs to earn $177,000 per year to qualify for a loan on an average home with the price tag of just below $900,000.

“$177,000? Like, who makes that?” said Jenn who lives in Langford. “It’s ridiculous.”

“That’s gone up by almost $6,000 versus May,” said Laird.

“Even in the high interest rate environment that we are in right now, there is still a very strong demand,” said Dr. Mark Colgate, professor at the Gustavson School of Business at the University of Victoria.

Colgate says it all comes down to the supply side of things and those increased interest rates are not helping.

“Borrowing money at seven per cent interest rates, having to buy building supplies that have increased dramatically over the last few years, that’s a risk,” said Colgate. “That puts construction companies off of building.”

“Things are getting worse and unfortunately there are no quick fixes,” said Philip MacKellar, a volunteer with Homes For Living, a Victoria housing affordability advocacy group.

MacKellar says current interest rate hikes will slow down some development but there are measures that government can take to increase the housing supply, bringing down demand in the long term.

“Cutting the red tape at the municipal level and designing really effective policies to get more infill housing or taller buildings,” said MacKellar.

The Bank of Canada is focused on bringing inflation down to two per cent. Last month inflation hit a yearly low of 2.8 per cent but Colgate says that target won’t be hit anytime soon.

“It’s going to be another two years, 2025 before we see interest rates come down, before we see inflation come down to that target of two per cent,” he said.

Leaving some to reconsider where they can afford to call home.

“We’re just renting and probably planning on moving out of the province to be honest,” said Jenn. “To buy somewhere nicer later on.”