Plus I find the Bay Area congested, racist, incestuous, and overpriced. Isn't Vancouver equally overpriced or worse? It's a beautiful city and seems like an amazing place to live, but I thought Vancouver's house prices were into the millions as well. In what way is the Bay Area racist? I'm not a fan of that region, but I've never had that particular impression (except among upper-tier VCs, who aren't specifically rac…
Yes, Vancouver housing is incredibly overpriced. Perhaps more-so than the Bay Area because wages have kept up even less (supposedly due to Vancouver's desirability as a destination). That doesn't mean there aren't good, well-paying jobs there, but on average, wages in Vancouver are much lower than, say Toronto. As for the racism aspect, I think the choice of word is a bit hyperbolic. That being said, as a Canadian wh…
For Vancouver, it takes 84-88% of your pre-tax income to afford a detached house (page 7 of the report). "Afford" means mortgage (principal+interest), property taxes, utilities, etc.
Okay, so 88% is high right? Well "pre-tax" means before the government gets their cut. In Canada, a high income earner gets taxed roughly 40% of their income and we all pay our mortgages/rent/utilities with post-tax money, so the affordability figure goes up over 100%. That means your entire paycheque is going towards paying for detached housing [2].
IIRC, in the US, you are allowed to deduct your mortgage interest from your income, meaning you get to pay with pre-tax income. But in Canada that is not allowed and you must pay the piper first.
[1] http://www.rbc.com/newsroom/pdf/HA-1127-2013.pdf
[2] Condos are at 42% affordability in Vancouver, which is still disastrously high since it is also using pre-tax income.
edit: 42% for condos, not 47%.
edit 2: corrected to say mortgage interest is deductible from income, based on reply. Thx!