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Since the Bank of Canada began tightening in March, the policy rate has increased by 400 basis points, while home prices on the Canadian Real Estate Association’s index have declined 10 per cent. These forces have pushed Toronto affordability to the worst on record, said St-Arnaud. Montreal, Ottawa and Vancouver are the most unaffordable since 1981, a time when interest rates were around 20 per cent.
How much of their income Canadian households spend on mortgage payments is now on average 29.6 per cent, almost three percentage points higher than in February and the highest since 1990. The decline in affordability will have a big impact on the market, he says, because more potential buyers will be priced out or have to look at cheaper alternatives. With interest rates unlikely to decline over the coming year, St-Arnaud expects housing prices will fall further.
Canada has plenty of land where almost nobody wants to live. If immigrants keep coming here they will compete for homes in the south driving prices up more and destroying more greenspace and farmland. We need a different approach.
Wages need to rise 40%!
it's called destroying the middle class
If property values fall 40% there will be a major problem for homeowners carrying large mortgages Assessment values will leave a huge gap btwn what is owned vs what is owed.
Putting the majority of homeowners under water would arguably not be good for the economy as a whole.
That dream is over. Prices have been unaffordable in Europe or Japan for decades. I do not think that will change.
About right
Please sell your beach house... it'll be underwater in a few years