Seven out of 15 major housing markets in Canada unaffordable to average person — and good luck renting

Good morning! We’ve been hearing a lot about home affordability in this federal election, so how affordable is a home in Canada? Online real estate brokerage firm Zoocasa in a study this week finds that of the 15 major cities across the country, eight of them would be affordable for the median-income earner. In the other seven, that earner wouldn’t qualify for a mortgage large enough to buy a home unless they came up with a down payment that would take decades of saving.

Greater Vancouver, Fraser Valley, B.C. and the Greater Toronto Area are the priciest markets. In Vancouver where the benchmark house costs $993,300, the median income of $72,662 would qualify for a mortgage of $241,994. It would take a household setting aside 20% of its income a year 52 years to save up the shortfall, $751,306 or 76% of the purchase price, Zoocasa calculates. In the Fraser Valley and Toronto, median-income buyers would have to come up with 70% and 63% of the purchase prices of $823,300 and $802,400, respectively – requiring them to save for 42 and 32 years.

Looking for something a bit more affordable. Try Regina (most affordable), Saskatoon, Winnipeg, Halifax-Dartmouth, Edmonton, Calgary, Ottawa and Montreal. If buying is out of the question, how about renting? A new report by RBC Economics says vacancy rates in Canada’s biggest cities are historically low and that is pushing rents to “uncomfortable highs.” In Vancouver and Toronto where the vacancy rate has fallen below 1% the average rent for a two-bedroom apartment rose 6.3% and 4.5% respectively last year. RBC forecasts Toronto must gain 26,800 rental units a year to meet demand. Yet over the past 12 months 4,300 purpose-built rental apartments were completed (a 25-year high). Add to that condos and the pace of new units still has to at least double. RBC says that of all cities in Canada Toronto stands the least chance of eliminating its rental deficit and it’s time for policy makers to step in, not just by removing regulatory obstacles, but by offering incentives.

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