Cost of Living

[someone123]

Originally Posted by craneSpotter

well Calgary seems to gave the highest non-mortgage debt levels and Montreal the lowest - out of major cities.

It makes sense to correct for income here, and Calgary has higher incomes than average (maybe that is slipping now). Vancouver is around average or lower, so the debt load on households there might be more onerous. If you make $50k a year, $20k in debt is huge, but if you make $200k it's not a big deal. I am surprised though by how little variation there is from city to city.

In Vancouver I suspect the mortgage debt is a bigger issue than the non-mortgage debt. You also might qualify for less other credit if you've got a big mortgage. I've never seen numbers for the amount of mortgage debt actually carried by households in Vancouver, however, so this is all just my conjecture. A lot of people living in very expensive houses inherited them or bought them back when they were cheaper.

[LeftCoaster]

Originally Posted by someone123

It makes sense to correct for income here, and Calgary has higher incomes than average (maybe that is slipping now). Vancouver is around average or lower, so the debt load on households there might be more onerous. If you make $50k a year, $20k in debt is huge, but if you make $200k it's not a big deal. I am surprised though by how little variation there is from city to city.

Though incomes are lower in Vancouver, net worth, even when correcting for housing value, is quite high, which also allows for an increased debt load.

[Nouvellecosse]

Originally Posted by LeftCoaster

Though incomes are lower in Vancouver, net worth, even when correcting for housing value, is quite high, which also allows for an increased debt load.

I can see how it would "allow" for a higher debt load in the sense that people could use their non-monetary assets as collateral or leverage, but I don't see how that would make the debt any more manageable than it would be for someone else with the same income, unless they were planning on selling off the assets to help with repayment.

[LeftCoaster]

Investment dividends? Rental income from owned proprieties? Retirees living off 401Ks?

Many very wealthy people in Vancouver don't work yet spend a bundle and rack up debt.

[Nouvellecosse]

Originally Posted by LeftCoaster

Investment dividends? Rental income from owned proprieties? Retirees living off 401Ks?

Many very wealthy people in Vancouver don't work yet spend a bundle and rack up debt.

Aren't those considered income? If the investments are increasing people's income, then why would incomes in Vancouver be lower?

[LeftCoaster]

Sure, but it would be a much lower income than someone would expect out of a HNW individual. Plenty of wealthy retirees and immigrants who pull limited amounts of cash out of investments every year but spend in an upper income bracket.

[craneSpotter]

Originally Posted by Nouvellecosse

Aren't those considered income? If the investments are increasing people's income, then why would incomes in Vancouver be lower?

I think this article explains one of the contributing factors to the 'average' household incomes in metro Vancouver being skewed lower when based on Statistics Canada data. Richmond has many families living below the poverty line based on 'reported income' but residing in million dollar+ homes.

Vancouver Sun - June 13, 2015

Why does a Richmond neighbourhood with many expensive mansions also appear to be one of the city’s poorest?

The upscale neighbourhood of Thompson, where properties typically sell in the $1-million to $3-million range, ranks high for poverty, according to Statistics Canada figures.

But former Richmond Mayor Greg Halsey-Brandt said the predominantly single-family Thompson neighbourhood has “the most expensive homes and the second highest level of household poverty” in Richmond because many residents under-report their global incomes to Canadian tax officials.



Read more: http://www.vancouversun.com/business...#ixzz3xp4PpumU