Single-income earners are being priced out of Canada’s housing market
There are signs that the unprecedented landscape of Canada’s housing market is heading in the opposite direction.
The national average price of a home in Canada hit a record high in February -- $816,620 – representing a 20 per cent spike compared to the same time last year.
But it appears February’s record may also represent a peak in the national home price average.
A new report from the Royal Bank of Canada’s Robert Hogue is warning of a dramatic “correction” to a market that has seen homes selling a significant level above asking prices, pricing out prospective homebuyers.
Hogue’s report noted that the correction is just beginning, with home prices expected to reach lower levels than RBC anticipated earlier this year.
“We project home resales to fall nearly 23 per cent this year and 15 per cent next year in Canada,” Hogue wrote in a July 22 release.
For Halifax realtor Richard Payne, the housing market forecast is a good thing for single-income home buyers.
“That’s been the biggest challenge for everybody,” he explained. If you’re just looking at a single income, how do you afford an average-priced house in some of those bigger markets across the whole of Canada, but more specifically, in Atlantic Canada?
Payne, responding to a new report by online company Zoocasa that analyzed 20 housing markets across Canada to find the most affordable regions and property types for single-income buyers, said there has been a huge influx of buyers scooping up properties all over Atlantic Canada due to – primarily – affordability.
He noted that while listings remain slim, the next couple of months historically brings in a rise in homeowners putting up the for sale sign.
“A lot of the realtors that are working with buyers are keeping our fingers crossed that we’re going to see some more inventory show up, which will make things a little bit easier because it won’t be you and 15 other people trying to buy the same house,” he said.”
The Zoocasa survey concluded that Regina, Saskatchewan, was the most affordability city in the country for a single-income buyer, with an average home price of $322,800. Because the median income in the region is nearly $10,000 higher than the income required to put a down payment on a house, it’s financially feasible for single-income earners to consider buying a home.
St. John’s, Newfoundland and Labrador, and Saint John, New Brunswick, weren’t far behind.
One Maritime city that didn’t make the top five was Halifax, where the average house is selling for $536,000. With a median income of $49,000, it’s becoming increasingly difficult to find a home on a single income in the region.
“We’re finding the majority of buyers, unless you’re a first-time homebuyer or you’re a downsizing retiree, ideally, you’re looking for a single-family home and not necessarily a condo,” he said, pointing out that housing affordability also largely depends on the type of home buyers are seeking.
“From a house price point of view, we’re seeing in the Halifax area a flattening off of sale prices, so now it’s not that unusual to be actually getting a house for underneath asking price, which goes back a year was pretty much unheard of.”
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