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The Housing Affordability in Various Cities in Canada

Posted on 3rd Jul 2014 by Mark Stern
houses in row

According to the market-oriented analyses of housing affordability that is provided by RBC, Canada is actually recognized to be among the most affordable places to live in the world. In the housing system that is market based, people in the country are financing their own housing and they are independent of the government assistance.

 

However, in today’s housing market in Canada, the Royal Bank of Canada (RBC) have noted the deterioration of housing affordability index in Canada during the first quarter of the year. It is becoming even more difficult and challenging for many families to have their own home in various cities in the country, especially in those expensive ones. The housing affordability is also expected to get even worse.

 

You might have heard a lot about housing affordability from those real estate individuals and banks. Now, some people are focusing on one important question: ‘What income would it take to afford a home in one of the great cities in Canada?’

 

For an answer to such question, there is a hypothetical mortgage that was set up for the market with the use of average May resale prices that are shown by the Real Estate Association in Canada – a five-per-cent down payment as well as a 5-year fixed-rate mortgage at 2.99 per cent.

 

For the time being, the Royal Bank of Canada revealed that the deterioration in the housing affordability in the country doesn’t pose immediate threat to the overall health of the housing market in Canada. The Bank of Canada is not also expected to start nudging those interest rates higher. A lot of economists also do not expect the bank to make an action until year 2016. However, it is important to note that the government public policies of Canada will intervene once the housing affordability is stressed to the point that home ownership becomes unattainable even to those with full-time employment.

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