{"id":12689,"date":"2019-06-07T10:10:55","date_gmt":"2019-06-07T17:10:55","guid":{"rendered":"http:\/\/www.roryc.ca\/blog\/?p=12689"},"modified":"2019-06-05T13:57:43","modified_gmt":"2019-06-05T20:57:43","slug":"canadian-housing-affordability-just-saw-its-biggest-improvement-in-5-years","status":"publish","type":"post","link":"https:\/\/www.roryc.ca\/blog\/2019\/06\/canadian-housing-affordability-just-saw-its-biggest-improvement-in-5-years\/","title":{"rendered":"Canadian Housing Affordability Just Saw Its Biggest Improvement in 5 Years"},"content":{"rendered":"

National Bank\u2019s latest study of 10 major Canadian housing markets suggests affordability improved in the first quarter of the year as income growth outpaced home prices \u2014 and it looks like more relief is on the way.<\/p>\n

\u201cThe healthy labour market was the largest contributor to this development via a significant increase in income,\u201d write National Bank economists Matthieu Arseneau and Kyle Dahms in a report.<\/p>\n

\u201cCoincidentally, mortgage rates were not a drag on affordability for the first time in 7 quarters,\u201d they add.<\/p>\n

Incomes increased by a full percentage point, while home prices inched up 0.3 points.<\/p>\n

\u201cLooking ahead, there is hope for further improvement in affordability in Canada in Q2 given the recent drop in mortgage rates,\u201d the economists forecast.<\/p>\n

One way National Bank measures housing affordability is by looking at what share of household income is eaten up by mortgage payments for a typical home.<\/p>\n

In the first quarter, 48.7 percent of a median-earning household\u2019s income would be required to afford mortgage payments on a Canadian home. The measure does not take downpayments into account.<\/p>\n

While still high \u2014 experts suggest spending no more than a third of income on housing costs \u2014 that\u2019s a decline of 0.7 percentage points from the last quarter of 2018.
\n\"\"<\/a>
\nIt was the most significant quarterly improvement since 2014, Arseneau and Dahms note.<\/p>\n

Homing in on Canada\u2019s most unaffordable markets, there were also improvements.<\/p>\n

In Vancouver, pressure eased in both the condo and non-condo (detached and semi-detached homes) corners of the market.<\/p>\n

A typical Vancouver household in the first quarter needed to put 49.8 percent of its income to service a mortgage on a normal condo, down half a percentage point, quarter-over-quarter.<\/p>\n

\u201cThis was the first improvement in 15 quarters for the condo segment,\u201d the National Bank economists point out.<\/p>\n

For a house, the improvement was even more pronounced, at 2.5 percentage points. The downside is mortgage payments would require 101.1 percent of a household\u2019s income, meaning homebuyers in the median-income bracket are still completely priced out of the market.<\/p>\n

Meantime, in the country\u2019s second-most-expensive-market, Toronto, houses became more affordable while the measure worsened for condos, something that didn\u2019t happen anywhere else last quarter.<\/p>\n

Monthly mortgage payments for a detached or semi-detached house amounts to 67.3 percent of a median household income, down 0.4 percentage points compared to Q4.<\/p>\n

Condos remain more affordable, requiring 40.3 percent of a household\u2019s income to service a mortgage, but that\u2019s up 0.1 percentage points versus last year.<\/p>\n

\u201cAmong all segments and regions covered, the condo segment in Toronto was the only deterioration in the first quarter of 2019,\u201d reads the National Bank report.<\/p>\n

Canadian Housing Affordability Just Saw Its Biggest Improvement in 5 Years<\/a> by Josh Sherman | Livabl<\/p>\n","protected":false},"excerpt":{"rendered":"

National Bank\u2019s latest study of 10 major Canadian housing markets suggests affordability improved in the first quarter of the year as income growth outpaced home prices \u2014 and it looks … [read more<\/a>]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8],"tags":[],"class_list":["post-12689","post","type-post","status-publish","format-standard","hentry","category-market-updates"],"yoast_head":"\nCanadian Housing Affordability Just Saw Its Biggest Improvement in 5 Years • Rory C Real Estate | Oakwyn Realty<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.roryc.ca\/blog\/2019\/06\/canadian-housing-affordability-just-saw-its-biggest-improvement-in-5-years\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" 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