Archive for the 'Housing Affordability' Category

April 15, 2019

Is there a housing affordability crisis in Toronto? Recent news reports certainly seem to be leaning that way, but is that what’s really going on?

We’re breaking down the stats to look at the Toronto real estate market and what the data has to say about housing affordability.

  1. It’s now more expensive to buy than to rent.

According to the National Bank’s 2018 Q4 analysis, renting has become cheaper than buying in Toronto.

Analysts from the National Bank found that the price of the representative home (non-condo) in the metropolitan market in 2018 Q4 was $902,916. The household annual income needed to afford the representative home: $165,755.

The price of the representative condo in the metropolitan market in 2018 Q4: $536,082.
Household annual income needed to afford the representative condo: $98,413.
The premium/discount for buying compared to renting a two-bedroom condo in the GTA: 12%.

The months of saving required for the down payment of the representative home (at a saving rate of 10%): 112 months.
The months of saving required for the down payment of the representative condo (at a saving rate of 10%): 49 months.

  1. Resale activity was down in 2018.

RBC’s economics team found that resale activity slumped almost 16% in 2018 in Toronto. They don’t expect to see a meaningful rebound in 2019.

  1. Rental availability is at an all-time low.

According to the CMHC, the rental vacancy rate in Toronto dropped to a record low of 1.1% in 2018.

  1. But rental prices are continuing to increase.

Rentals.ca predicted that in 2019 the average rental rates will increase by 6% year over year on a national basis. In Toronto, the annual rental rate could increase as much as 11%.

The average rent for a one-bedroom apartment in Toronto in February of 2019 was $2,149 — the highest in the country, according to Rentals.ca. The average for a two-bedroom: $2,620.

  1. Toronto’s position is dropping in national surveys.

Demographia recently released its annual ‘Housing Affordability Survey’ and ranked Toronto as 10th out of 293 cities around the world for unaffordability. In 2017, Toronto held the 21st position.

The 2018 UBS Global Real Estate Bubble Index also ranked Toronto poorly, putting them as having the third worst “bubble risk” in the world.

Looking at the statistics, the question still remains – does this define an affordability crisis?

And, if it does, what is the solution?

Let us know what you think on social media. GeoWarehouse is on Twitter, Facebook, and LinkedIn.

GeoWarehouse’s property data tools can help you navigate housing affordability issues to find the best areas for your clients. Learn more today by calling 1-866-237-5937 or visiting www.geowarehouse.ca.

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In the final quarter of 2018, Canadian housing affordability worsened for a 14th consecutive quarter, found economic research from the National Bank Housing Affordability Monitor.

Using data from the Teranet-National Bank House Price Index, National Bank Deputy Chief Economist Matthieu Arseneau and Economist Kyle Dahms released a quarterly report on January 24, 2019 analyzing the final three months of 2018.

And they found that house prices are getting less affordable in many markets.

The Housing Affordability Monitor featured a representative home for each of the 10 metropolitan markets in the House Price Index, including the representative price for the condo market and for the non-condo market, and the average household income needed for each.

Here’s what they found for October, November, December of 2018:

1. Toronto Housing Market

Non-Condo

Price of the representative home in the metropolitan market: $902,916

Household annual income needed to afford the representative home: $165,755

Condo

Price of the representative condo in the metropolitan market: $536,082

Household annual income needed to afford the representative condo: $98,413

2. Montreal Housing Market

Non-Condo

Price of the representative home in the metropolitan market: $369,234

Household annual income needed to afford the representative home: $67,783

Condo

Price of the representative condo in the metropolitan market: $276,889

Household annual income needed to afford the representative condo: $50,831

3. Vancouver Housing Market

Non-Condo

Price of the representative home in the metropolitan market: $1,318,768

Household annual income needed to afford the representative home: $242,096

Condo

Price of the representative condo in the metropolitan market: $638,842

Household annual income needed to afford the representative condo: $117,277

4. Calgary Housing Market

Non-Condo

Price of the representative home in the metropolitan market: $494,689

Household annual income needed to afford the representative home: $90,814

Condo

Price of the representative condo in the metropolitan market: $266,107

Household annual income needed to afford the representative condo: $48,851

5. Edmonton Housing Market

Non-Condo

Price of the representative home in the metropolitan market: $422,508

Household annual income needed to afford the representative home: $77,563

Condo

Price of the representative condo in the metropolitan market: $231,117

Household annual income needed to afford the representative condo: $42,428

6. Ottawa-Gatineau Housing Market

Non-Condo

Price of the representative home in the metropolitan market: $428,595

Household annual income needed to afford the representative home: $78,680

Condo

Price of the representative condo in the metropolitan market: $261,454

Household annual income needed to afford the representative condo: $47,997

7. Quebec City Housing Market

Non-Condo

Price of the representative home in the metropolitan market: $286,491

Household annual income needed to afford the representative home: $52,593

Condo

Price of the representative condo in the metropolitan market: $211,768

Household annual income needed to afford the representative condo: $38,876

8. Winnipeg Housing Market

Non-Condo

Price of the representative home in the metropolitan market: $321,259

Household annual income needed to afford the representative home: 58,976

Condo

Price of the representative condo in the metropolitan market: $223,614

Household annual income needed to afford the representative condo: $41,050

9. Hamilton Housing Market

Non-Condo

Price of the representative home in the metropolitan market: $598,274

Household annual income needed to afford the representative home: $109,829

Condo

Price of the representative condo in the metropolitan market: $445,629

Household annual income needed to afford the representative condo: $81,807

10. Victoria Housing Market

Non-Condo

Price of the representative home in the metropolitan market: $850,469

Household annual income needed to afford the representative home: $156,127

Condo

Price of the representative condo in the metropolitan market: $485,937

Household annual income needed to afford the representative condo: $89,207

In some markets, the quarterly report found that the gap between condo and non-condo affordability is shrinking. The worst deteriorations in affordability in Q4 were in Victoria, Toronto, and Vancouver. The only markets showing an improvement were Calgary and Edmonton. Countrywide, affordability worsened.

View the full 2018 Q4 report from the National Bank here: https://housepriceindex.ca/wp-content/uploads/2019/02/NBFM-Housing-Affordability-Monitor-Q4_2018-Eng.pdf.

No matter what direction Canadian housing affordability heads, GeoWarehouse has tools that make you the property expert. Uncover real estate trends and opportunities before they hit the market.

Become a subscriber today. Call 1-866-237-5937 or visit www.geowarehouse.ca.

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