Housing affordability continues to go down generally according to historic norms in the first part of 2015. So says the most recent numbers from Desjardins Group (Desjardins: The largest cooperative financial group in Canada).
Affordability is calculated as going down when house prices rise faster than buyers’ ability to pay.
Of the 18 cities measured in the index, 12 are now listed as being less affordable than they are historically and this particularly is evident in some cities that are on the outskirts of Toronto. A prime example is St. Catharines, Ont., for instance, which is currently estimated to be 5.2 per cent less affordable than the historic norm.
Despite years of layoffs at its auto plants, Oshawa, Ont., has now also fallen into the “unaffordable” category as well.
A similar turnaround is taking place on the Prairies, but in reverse. With oil prices under pressure, western cities’ once-hot housing markets are starting to hurt.
Some changes for the once hot Calgary market: last fall, Desjardins listed Calgary as a city “to watch,” that is, a city at risk of an unaffordable housing market. This spring, Desjardins listed it as “affordable.”
Desjardins says this has largely been the case across Canada, except in some Prairie cities and in Quebec, where house price growth came in below income growth, improving affordability in that province.
According to the Canadian Real Estate Association, house prices in Canada continued to climb in April, rising 9.5 per cent from a year earlier, to a nationwide average of $448,862.
Incomes in Canada have been growing at an average pace of 2.7 per cent recently, or less than a third of house price growth.
But a surprise rate cut by the Bank of Canada in January had lenders pushing down mortgage rates even lower. Many mortgage rates are BELOW 3 per cent.
That has helped keep mortgage payments in check, even though house prices are rising (don’t hold your breath on that one)!
As always, markets like housing are subject to many external influences, but the overall trend of the Desjardins numbers sees real estate increases not just being about the big cities anymore and let’s face it, that is good news for St. Catharines property owners right now!
SOURCE: Desjardins
To receive similar content, “Like” us on Facebook @ https://www.facebook.com/niagarabuzz.ca
