Wednesday, August 31, 2016

Affording a home in Toronto harder now than it has been in 25 years: report

Maybe we should stop letting so many people immigrate into this country until we get our house in order? Just a thought.
Keeping a roof over your head making you feel like you’re in the poorhouse?

It's not your imagination.

It’s now harder to afford a home in the city that at any point in the last 25 years, according to a study released Tuesday by RBC.

The study tracked housing affordability through a measure that looks at the percentage of median household income being spent on mortgages, utilities and property taxes. The higher the number, the more people are being squeezed to afford their homes.

At about 60 per cent, the number is the highest it’s been since about 1990 — right before a housing bubble burst in Toronto — and represents a 2 per cent increase in the last five years.

A lack of supply and overwhelming demand is driving the surge, said RBC senior economist Robert Hogue.

“The thing is people still want single detached homes,” he said.

And, there simply aren’t enough of them to go around.

But there's a bit of a difference from 1990 in terms of condos. “Condo prices continue to rise at this stage but no where near as much as with single detached homes,” said Hogue.

Hogue said condos are still a “relatively affordable” option in the city, especially compared to Vancouver, where property values have gone up by 30 per cent in the last year.

“That’s clearly not sustainable,” he said.

“In Toronto, I would argue it’s probably not sustainable either, but it’s not as extreme, and there’s probably more room for a soft landing scenario to unfold.”
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