Affordability is quickly dropping in Canada at a rate that hasn't been seen in over 30 years.
Right across the country, in every housing category, affordability that dropped during the second quarter of this year, coupled with 3 previous quarters of decreased affordability has rolled back any affordability improvements that happened at the beginning of COVID-19.
The measure of affordability jumped 2.7% last quarter - the biggest quarterly increase in more than 3 decades. Affordability eroded in almost all of Canada's major markets, with Toronto's affordability measure jumping up 4.1%, Vancouver up 3.2% and Ottawa up 3.1%.
The increases have affected the amount of income Canadians are having to put towards their housing costs to a national average up to 49.7%.
Overall, affordability is most strained in Vancouver, where ownership costs respresent 63.5% of household income, Toronto - 59.1% and Victoria - 48.0%.
Ottawa, at 38.5% and Montreal at 38.4% are 2 other markets where aggregate measures look historically high.
Many parts of the Prairies and Atlantic Canada have also experienced increases in affordability, but are much more within Canadians reach, with cities like Calgary, Edmonton, Regina, Saskatoon, Winnipeg, Saint John, Halifax and St. John's measuring below their long-term affordability average.
Home prices are expected to continue rising across the country in the coming months as inventory levels remain low, but there is some relative relief expected in 2022 as appreciation is expectd to slow and prices projected to flatten. Let's see what happens??
At Keith Vines and Associates, we offer good old fashion service, working with our home buyers and sellers in a relaxed, friendly manner, applying every available tool available to achieve the best possible outcome. Please take a moment to sign up for Keith’s Grapevine – a periodic eletter full of interesting market news, advice and tidbits