Posthaste: Prices need to fall another 40% to make buying a home in these cities affordable

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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.

House prices may drop/decrease, but if this coincides with job losses (recession), who will buy?

rexglacer Too bad…So Sorry, these cities voted liberal & NDP. They got exactly what they voted for.

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Posthaste: Prices need to fall another 40% to make buying a home in these cities affordableCanada home prices need to fall much further as Bank of Canada interest rate hikes increase costs for homeowners. Find out how much further Please sell your beach house... it'll be underwater in a few years About right That dream is over. Prices have been unaffordable in Europe or Japan for decades. I do not think that will change.
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