Canada’s most unaffordable cities to live in and how to cope
The Canadian housing market has seen tremendous growth in the past decade, making it astronomically expensive for homebuyers. The pandemic that shook the world since December 2019 has seen a rise in demand for larger homes as people have, since then, been working remotely.
Homeowners are finding themselves at the threshold of housing unaffordability. Even after the recent ongoing pandemic, when the market is low, home prices remain significantly high. In fact, data by Point 2 Homes shows that in 38 out of the 50 biggest Canadian real estate markets housing affordability has plummeted.
There is an increasing disparity between home prices and incomes of people or households. The Point 2 Homes study also revealed that wage growth is languishing much behind home price growth. If you are looking at buying a new home let us take you through Canada’s most unaffordable cities. Topping the list is Burnaby in British Columbia, where 44.7 percent of people's income is spent towards servicing a mortgage. Following the close, is Richmond in BC at 44 percent, Oakville, Ontario at 43.8 percent, Vancouver in BC at 41.6 percent, and Kelowna, also in BC at percent. Langley, Coquitlam, Saanich, Richmond Hill, Ajax, Mississauga, Markham, Vaughan, Brampton, Whitby, and Surrey also feature on the list. Edmonton in Alberta, however, has the most notable average household income increase - a 53 percent rise as compared to that being earned in 2010. Other cities record a 'much more modest wage growth' which is usually between 11 percent and 49 percent.
Those looking at buying homes and not in the race for prime locations can mull buying a home in Halifax, Nova Scotia. A study revealed that Halifax is the most affordable city in Canada. The mortgage people pay here is 10.8 percent of the average household income. Additionally, people in Windsor and London, both in Ontario, spend 11.4 percent of the average household income on servicing mortgages. Also featuring on the list just behind the aforementioned three, are Quebec, Oshawa, Saguenay, Sherbrooke, Winnipeg, Regina, and Trois-Rivieres.
How to cope with unaffordable housing?
Scary as it sounds, unaffordable housing is a situation faced by many. The question remains about tackling this hurdle. The answer lies in some emerging trends such as co-ownership with friends and family. Co-ownership is commonplace in Vancouver and Toronto. Other measures are being taken elsewhere. For example, in Edmonton, Brampton, and Ottawa, people have started sharing a home meant for one family with two families to ease the mortgage burden. This is executed by the division of the floors among the two families. Another trend observed, is that of young individuals seeking financial help from their parents towards making down payments.
If you are in the market looking for a home and have any problem in researching the marketplace and looking at mortgage rates best suited to your financial health, do not hesitate to reach out to us. Our in-depth knowledge of the market along with a network of professionals can help find a solution to all your housing needs.