Housing Situation Report in Canada: Syntesys
// September 11th, 2009 // Real Estate
The Canada Mortgage and Housing Corporation recently published a report on the Canadian housing market conditions of 2008 and the 1st half of 2009. It deals mainly with the housing starts and with the affordability to rent & purchase.
The housing market in Canada is now slowly recovering from the last year’s shock, as it appears from the report. While new home market actual starts decreased from January to June 2009 by over 43 per-cent compared to the same period in 2008, the MLS sales increased by over 17 per-cent in comparison to the July 2008 figures.
New housing price index growth seems to follow the general trend on the housing market. The average price change in Canada has changed from -0.6% (January) to -0.1% (May). The new housing price in Toronto has changed only slightly over zero values, in keeping with the recovery of the resale market.
Economic conditions: Unemployment
We can be fairly optimistic now in regard to our economy. First, the unemployment growth seems to have got under control. In July, the number of net losses was 13,000, whereas during the first quarter of 2009, the fall reached 273,000. Secondly, according to the Bank of Canada, the various stimulus packages brought out by many countries in the last year are slowly showing out some outcomes.
Affordability to rent
The home ownership or renting affordability is calculated based on the amount of working hours a person has to perform in a month in order to bring the average price of a 2-bedroom apartment rent or the average mortgage payment down to 30% of gross monthly salary. In 2008, the average hourly wages has grown by more than 5% up to $23.69 (Ontario: $24.65, Toronto: $24.93)).
From 114 to 113 hours per month – that is how the average number of hours required to bring the average rent for a 2-bedroom flat down to 30% has changed. While St John’s, Brantford and Guelph faced the biggest fall, Toronto observed decrease from 149 to 146, securing it’s position of the 2nd most expensive city in this regards right after Vancouver.
Affordability of home owner-ship
While the general decrease in the hours needed to rent was rather small, the general decrease in the hours needed to bring the average mortgage payments down to 30 per-cent of gross income is more significant – from 255 hours in 2007 to 240 hours in 2008. In Toronto, the decrease of hours needed to own was quite significant – from 299 to 286. But even so, Toronto still holds the 4th position among the most expensive cities regarding owning an apartment, just after Vancouver, Victoria and Abbotsford.
End notes
As a result of the current situation when the housing market is still cooling from the second half of 2008, the new housing is now somewhat more affordable, which is news I really like to bring to my clients, being a real estate agent in Toronto. First half of this year shows steady or slightly declining prices and slightly improving affordability of both renting and home owner-ship. As the interest rates are still staying quite low, it is now a good time for buying a property, before the market takes a second breath.
