The COVID-19 pandemic has thrown the real estate market into flux, with larger homes in demand as more people work from home during this time.
A recent report from the Canadian real estate trend analysis firm Point2 Homes illustrates that mortgage affordability has deteriorated in the last decade many Canadian urban centres.
In 18 cities, home prices increased between 100% and 148%, whereas the most significant income gain was 53% in Edmonton, AB, according to data received by Media in Toronto from Monica Alistar, Point2 Communications Strategist.
The most unaffordable cities are Burnaby, BC; Richmond, BC; and Oakville, ON.
“Although not all of them became unaffordable, a total of 38 cities experienced deteriorating mortgage affordability due to the widening gap between the growth of home prices and incomes,” according to Poin2 report.
In Oakville, ON; Burnaby, and Langley, BC, owners would need to earn an additional $50,000 to cover their mortgage stress-free, it said.
At the other end of the spectrum, the most affordable cities are Halifax, NS; Windsor, ON and London, ON.
As for Toronto: In 2020, homeowners in Toronto spent 28% of their income on mortgages, compared to just 18% in 2010, the report read.
Home prices more than doubled in Ontario’s capital (104.6% increase between 2010 and 2020), while wages grew by just 32.1% in the same time-frame.
“Home prices are increasing much faster than wages, causing affordability to erode despite mortgage rates remaining at record lows,” wrote Point2 in its report.
“Incomes not only didn’t keep the pace, but in some cities, wage growth is far behind home price growth.”