Ontario leads housing affordability dip: bank
Strong housing markets Ontario and British Columbia’s drove home ownership further from the average Canadian’s reach in the first quarter of 2017, but that may turn around soon, according to the latest housing affordability study by Desjardins.
“Prices have been running hot through the country as a whole, but obviously ... in some areas more than others,” said Jimmy Jean, vice president of economic strategies at Desjardins.
The Desjardins s t udy found average housing affordability — which is calculated as the ratio between the average personal disposable income per household and the qualifying income” — fell 3.3 per cent in the first quarter. Affordability in Ontario fell by nearly double the national average, or six per cent, but even Quebec, with the highest number of cities earmarked as affordable, saw its rating fall by 0.2 per cent.
Jean said the lack of affordability “has spread outside Toronto to really all of southern Ontario” and persists around Vancouver. Montreal and Calgary are considered “beyond normal, he noted, while the report identified Winnipeg as a city to “watch closely.”
Going forward, Jean said, affordability is likely to deteriorate further in Quebec, but with prices where they are “there’s a long way to go before we get to a problematic situation or affordability crisis in Quebec. We have to remember a house is, on average, $ 300,000 — that’s a fraction of what it costs in Toronto or Vancouver.”
Michael Dolega, s enior economist at TD, said a change in Quebec prices would be welcome.
“As money is flowing out of B.C. and Ontario because of ( newly imposed foreign buyers’) taxes, it may flow to Montreal,” he said.
“Some erosion in affordability is likely but it’s still very good.”