Economists say Housing affordability in Canada’s real estate market is at crisis level
According to a new study, Economists say Housing affordability in Canada’s real estate market is at crisis level, which says that re-acceleration of home prices, with higher rate of interest and are “slamming” cost of home ownership again.
According to the RBC Housing Affordability Measures, cost to buy home in Vancouver reached at its highest level on records in the very first quarter of this year.
Residents of Vancouver need around 88% of income of their households to buy a home, while residents of Toronto need more than 74% of their income to cover up the cost of a home.
This compares with Canadian average of around 48% of income of household and less than 44 % in other cities like Calgary and Montreal.
Robert Hogue, Senior Economist at RBC Economic Research said that affordability is a major issue in Canada’s two largest markets. In Vancouver, it is at crisis levels and poses tremendous and amazing challenges for Toronto-area buyers despite of improving in last 2 quarters.
Robert also added because they all apply from the coast to coast, higher rate of interest that pressured affordability in all Canadian Real estate markets. In Vancouver, re-acceleration of price of home in the last 3 quarters amplified this effect.
“All of these factors returned affordable to a sharp track after a short period of reprieve in the late 2016 and early period of year 2017.”
Despite of a series of different measures which are introduced by the government and regulators over the last 2 years in an attempt to rein in price of properties in Vancouver, $1,094,000 is the benchmark price for a home in Greater Vancouver that rose to a record in May, even home sales fell down by 35% from a year ago, as announced by Real Estate Board of Greater Vancouver.