The National Bank of Canada recently released its August update of the Canadian Housing Affordability Monitor. Here are the highlights:
The report finds that Q2 2021 saw the worst deterioration in housing affordability in 27 years, with its indicator dropping by 3.2 points. This indicator is estimated as a percentage of the median income required for a monthly mortgage payment on a median-priced home in various Canadian real estate markets.
Affordability deteriorated in the second quarter in all ten real estate markets covered. The worst deteriorations were in the Toronto, Victoria, and Vancouver markets. Ottawa-Gatineau, Montreal, and Quebec City are in fifth, sixth and eighth place, respectively. Alberta’s two main cities which have been struggling with a weaker economic upturn than the other large provinces experienced the smallest variations of the ten cities studied.
The report suggests that Montreal households now require an annual income of $100,489 to buy a detached home in the local market. The income needed to afford a condo is now $72,688. For Quebec City, these amounts are $67,447 and $46,533 respectively.
The report estimates that a total of 42 months at a savings rate of 10 per cent is required to accumulate the down payment for a detached home in Montreal. In Quebec City, the time required is 28 months. In the Ottawa/Gatineau, Toronto and Vancouver areas, these indicators currently stand at 52, 318 and 411 months, respectively.
