Canada's Housing (un) Affordability
Scott Kok - Jun 03, 2024
Why home ownership in Canada is becoming more and more unattainable.
With all the recent talk of soaring home prices, high interest rates and being priced of the housing market, I decided to create the below table showing current housing affordability separated by province.
It shows the average household income and the maximum house affordability given that income vs. average home prices.
When compiling this data I wasn't really shocked by any of the information besides the Average Home Price YoY % changes as I was expecting more of a flat outcome for most provinces.
Sources: -Family Median Income: Family of 2 - Stats Canada (2022)
-Affordability: Based off a mortgage qualifying rate of 7.6% with a 5% down payment and 25 year amortization
-Average Home Prices: Statistics from CREA benchmarks (April 2024)
Living in Winnipeg I wanted to specifically take a closer look at individual cities and how we compare to other cities across Canada.
Source:Tracking Canadian Housing Market Affordability (1999 to 2024) (themeasureofaplan.com)
The above chart really hit home (no pun intended) as Winnipeg has one of the lowest "Mortgage as a % of income" at 24.3% vs. other markets like Toronto at 73.1%.
The average monthly mortgage payment in Winnipeg is $1,811 vs. $5,561 in Toronto.
On average Winnipeg ranks amongst one of the cheapest cities in Canada to purchase a house with the average home price being $349,500 vs $1,090,900 in Toronto.
This truly shows how unaffordable large Canadian cities like Toronto and Vancouver are and why this is a frequent topic of conversation.
Looking back at Winnipeg in 2000, the average price of a home was $84,834 with the average family income of $61,000 which represents a price to income ratio of 1.4x.
The price to income ratio has over doubled in Winnipeg since 2000 pricing out new families looking to purchase their first home.
If you're looking for an advisor I'd love to work with you and help you meet your goals. I'm always open to chatting and you can book a call with me by clicking the link below.
Scott Kok, PFP®
Associate
