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Housing affordability drops to 18-year low ...
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| SuperJimbo |
The Globe and Mail
Housing affordability drops to 18-year low
March 14, 2008 at 11:44 AM EDT
BY ROMA LUCIW
Housing affordability across Canada has dropped to its lowest level since the country slid into a recession in 1990, with the standard two-storey home eating up almost half of a family's pre-tax income, says a report from the Royal Bank of Canada.
The RBC report, released Friday, found that Vancouver was still by far the most expensive place to buy a place, taking up 74 per cent of household income, followed by Toronto at 47 per cent, Calgary at 42 per cent, Montreal at 37 per cent and Ottawa at 32 per cent.
The bank's affordability measure looks at the proportion of pre-tax household income needed to own a home in Canada. It found that a sustained rise in housing prices, driven by strong economic expansion and a solid job market, led housing affordability nationwide to close last year at its worst level in 18 years.
In 1990, soaring interest rates and an economic recession made houses less affordable, said Derek Holt, assistant chief economist at the Royal Bank of Canada and the author of the bank's housing affordability report. “Today, a long upward trend in house prices driven by sounder macroeconomic fundamentals, like job growth, is primarily responsible.”
Boosted by surging commodity prices, Canada's economy has been on tear. An abundance of jobs, rising incomes and historically low interest rates has led many Canadians to buy homes for the first time. But the relentless increase in prices have squeezed an increasing number of Canadians out of the housing market, and real estate experts agree that a pullback in the cards.
Indeed, affordability in all four housing classes eroded across the country in the latest quarter, RBC said Friday, with the exception of the cooling Alberta market, where average prices dropped. Resource-rich Western Canadian cities like Calgary and Edmonton have seen some the steepest housing price gains.
On a national basis, the standard condo is still the most affordable type of housing for most Canadians, eating up about 30 per cent of pre-tax household income, the RBC report said. A standard townhouse was next at 34.5 per cent, followed by a detached bungalow at 42.5 per cent. A standard two-storey home is the least affordable housing type, at 48 per cent.
However, the RBC report foresees some relief in the form of lower payments in 2008, saying that the popular five-year mortgage rate will drop a further 75 basis points by year-end. “Going forward, falling mortgage rates, weakening house price gains and decent income growth should all lead to improved affordability across most markets.”
A comparison of Canadian and U.S. household finances shows that while Americans are still modestly richer, they are much more heavily leveraged and further in debt than Canadians. The steep levels of debt makes Americans “more vulnerable to ongoing credit market turmoil and risks towards house prices,” said Mr. Holt.
At the same time, the steep depreciation of the U.S. greenback over the last six years has left Canadians relatively richer by increasing the value of what the now stronger loonie can buy on world markets, Mr. Holt said.
http://www.reportonbusiness.com/ser...l_gam_mostview# |
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| SkyHigh |
nice house in the pic..
1% of canadians can afford that one. Maybe |
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| kotsy |
| quote: | Originally posted by SuperJimbo
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looks like the house from Ferry Bueller's Day Off (his friend's) |
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| Silky Johnson |
| It's Falling Water designed by Frank Lloyd Wright. |
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| Binder_Dundat |
| quote: | Originally posted by jennypie
It's Falling Water designed by Frank Lloyd Wright. |
lol
Thanks, now I can finally get some sleep. |
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| Jayx1 |
Something has gotta give soon with this ridiculous housing market! I hate to say this because it's harsh and will probably affect my business as well but.... this country actually is in need of a recession in order to put some real perspetive into these runaway prices.
PS a recession or downturn is the BEST time to make money. Buy low, sell high. As donald trump and kiyosaki says, you make your money when you buy not when you sell! |
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| Vivid Boy |
| donald trump and robert kitoyski can suck my cock. theyre not even real estate tycoons. theyre celebrities, thats it thats all. Trump has lost more money then he has ever made he should stick to wrestling |
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| afterhrsgurl |
| quote: | Originally posted by Jayx1
As donald trump and kiyosaki says, you make your money when you buy not when you sell! |
last time i checked kiyosaki was only getting money from his books and his seminars where he’s pimping his products |
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| UmmiE |
| My dad is looking for a 5 bedroom house in milton/erinmills town centre area......He went to see couple of them today dont know what happened??? |
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| patpicos |
| good thing i bought 3 years ago :) |
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| Jayx1 |
| quote: | Originally posted by Vivid Boy
donald trump and robert kitoyski can suck my cock. theyre not even real estate tycoons. theyre celebrities, thats it thats all. Trump has lost more money then he has ever made he should stick to wrestling |
actually he made it... lost it all and then some and made it all back. A guy who can make a fortune twice is quite impressive. He is a celebrity because hes a billionaire, not the other way around. As for kiyosaki and his books, same thing. These guys have just proven that they know how to create new business opportunities over and over.
I dont know either of them personally and i dont know whether they are men to like or hate. But im certainly not going to hate on people because they are successful! |
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| 1dawoman |
| quote: | Originally posted by Binder_Dundat
lol
Thanks, now I can finally get some sleep. |
hahaha |
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