{"id":17144,"date":"2021-01-08T10:10:00","date_gmt":"2021-01-08T18:10:00","guid":{"rendered":"http:\/\/www.roryc.ca\/blog\/?p=17144"},"modified":"2020-12-30T10:24:46","modified_gmt":"2020-12-30T18:24:46","slug":"canadian-homes-became-less-affordable-in-3q-of-2020","status":"publish","type":"post","link":"https:\/\/www.roryc.ca\/blog\/2021\/01\/canadian-homes-became-less-affordable-in-3q-of-2020\/","title":{"rendered":"Canadian Homes Became Less Affordable in 3Q of 2020"},"content":{"rendered":"<p style=\"text-align: justify;\">Even as mortgage rates were hovering at record lows, Canadian homes became less affordable in 2020\u2019s third quarter.<\/p>\n<p style=\"text-align: justify;\">RBC, which publishes a quarterly housing affordability monitor, said strong price increases driven by detached home demand caused affordability to deteriorate during that period. Rock bottom mortgage rates helped ease the hit to affordability, but were not enough to offset it entirely.<\/p>\n<p style=\"text-align: justify;\">RBC released its third quarter report this week, along with commentary from Senior Economist Robert Hogue who noted that the affordability gains recorded in the second quarter had been partly rolled back during the July to September period.<\/p>\n<p style=\"text-align: justify;\">The bank, which measures Canadian housing affordability in terms of the share of household income needed to cover homeownership costs, said that the national affordability measure for 2020\u2019s third quarter was 49.1 percent. This means an average household would need to dedicate 49.1 percent of its income to cover homeownership costs. That\u2019s up 1.3 percentage points compared to the second quarter reading, which was RBC\u2019s best affordability reading in four years.<\/p>\n<p style=\"text-align: justify;\">The second-quarter improvement in housing affordability was spurred by pandemic-related government financial aid, lower mortgage rates and a decline in household utility costs.<\/p>\n<p style=\"text-align: justify;\">In the third quarter, government financial support eased while home prices across the majority of local Canadian markets surged, wrote Hogue. These were the primary contributors to the deterioration in affordability measured during that time.<\/p>\n<p style=\"text-align: justify;\">\u201cThe pandemic tremendously disrupted Canada\u2019s housing market, though it ultimately hasn\u2019t destroyed activity,\u201d Hogue wrote.<\/p>\n<p style=\"text-align: justify;\">\u201cSpring transactions were shifted to the summer and fall. The displacement, rather than loss, of activity cranked up the market\u2019s heat in the third quarter, propelling prices to new heights and rolling back some of the second quarter\u2019s affordability gains,\u201d he continued.<\/p>\n<p style=\"text-align: justify;\">Robust homebuyer demand and tight supply characterized the final months of the year and are expected to continue into 2021, so the economist believes a further loss of affordability is likely in the near future.<\/p>\n<p style=\"text-align: justify;\">It\u2019s worth noting that a decline in affordability doesn\u2019t mean homes in markets across the country have become unaffordable. Hogue wrote that owning a home is still affordable in most of Canada, but major issues remain for buyers in Vancouver, Toronto and Victoria, where prices are highest. Buyers in Montreal and Ottawa are also feeling some \u201cmoderate strains\u201d in affordability.<\/p>\n<p style=\"text-align: justify;\">\u201cMuch of the affordability stress in these larger markets is due to high prices for single-detached homes. Condo apartments are a generally more achievable option for buyers,\u201d wrote Hogue.<\/p>\n<p style=\"text-align: justify;\">Looking at the big picture, overall affordability has improved in the vast majority of Canadian markets compared to the previous year, according to the RBC report. Unsurprisingly, the challenging markets \u2014 Toronto, Vancouver and Victoria \u2014 have retained their status as the least affordable in the country.<\/p>\n<p style=\"text-align: justify;\"><a href=\"https:\/\/www.livabl.com\/2020\/12\/housing-market-boom-canadian-homes-less-affordable.html\" target=\"_blank\" rel=\"noopener noreferrer\">RBC : Summer Housing Market Boom Made Canadian Homes Less Affordable<\/a> by Sean MacKay | Livabl<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Even as mortgage rates were hovering at record lows, Canadian homes became less affordable in 2020\u2019s third quarter. RBC, which publishes a quarterly housing affordability monitor, said strong price increases &hellip; [<a href=\"https:\/\/www.roryc.ca\/blog\/2021\/01\/canadian-homes-became-less-affordable-in-3q-of-2020\/\">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-17144","post","type-post","status-publish","format-standard","hentry","category-market-updates"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Canadian Homes Became Less Affordable in 3Q of 2020 &#8226; 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\/2021\/01\/canadian-homes-became-less-affordable-in-3q-of-2020\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"Canadian Homes Became Less Affordable in 3Q of 2020 &#8226; Rory C Real Estate | Oakwyn Realty\" \/>\n<meta name=\"twitter:description\" content=\"Even as mortgage rates were hovering at record lows, Canadian homes became less affordable in 2020\u2019s third quarter. 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