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Housing Affordability in Canada 101

What is Affordable Housing in Canada?

Today, an “affordable” house in the Toronto area costs on average around $1,025,200. According to the CMHC (Canadian Mortgage and Housing Corporation) housing is considered “affordable” if it costs less than 30% of your income.


The Most Unaffordable Cities In North America

Looking at Statistics Canada’s numbers, the housing crisis is more severe in small, suburban areas and cities. According to The Globe and Mail, in BC, 31% of renters in West Vancouver spend more than half their income on housing, compared with 25% in the City of Vancouver itself. According to a 2021 report by Oxford Economics, five Canadian cities are ranked among the ten least affordable cities in North America, with Vancouver being the 1st, Toronto the 2nd and Hamilton a Toronto suburb the 3rd.

Most Expensive Canadian Cities To Live in 2020

City

Home Price (2020)

Household Income (2020)

% of Income For Mortgage (2020)

Burnaby, BC

1,048,500

100,408

44.7%

Richmond, BC

1,099,311

107,024

44.0%

Oakville, ON

1,027,355

100,408

43.8%

Vancouver, BC

1,027,355

105,850

41.6%

Kelowna, BC

957,100

100,408

40.8%

Langley, BC

950,700

100,408

40.5%

Coquitlam, BC

902,337

100,408

38.5%

Saanich, BC

868,100

100,408

37.0%

Richmond Hill, BC

907,867

107,024

36.3%

Ajax, ON

851,718

100,408

36.3%

Mississauga, ON

881,348

107,024

35.3%

Markham, ON

871,818

107,024

34.9%

Vaughan, ON

871,818

107,024

34.9%

Brampton, ON

865,467

107,024

34.6%

Whitby, ON

836,050

107,131

33.4%

Surrey, ON

865,467

115,134

32.2%



The Vicious Circle Of Unaffordable Housing

The lack of low-cost rentals of houses supplied in major cities directly results in the rising costs of renting and buying of properties. Majority of rentals and houses in the cities are overpriced and privately owned by investors, forcing low-income workers out of the cities and away from jobs to look for more affordable housing in rural areas. 


WIth the increase of people moving to rural areas it can also increase house prices in these areas as well. 


The Real Estate Boom

The increased demand in real estate has a direct link to prices, which can be from intense growth in these major cities. Due to their popular vacation destinations, COVID-19 pandemic (lower mortgage rates), limited supply. 


Will Everything Go Back to Normal Post-Pandemic?

According to CMHC, the economy is expected to return to normal towards the end of 2023. Other economic variables such as immigration, higher consumer and business levels and the decline of disposable income as government support comes to an end and people return to work.


All in all, Canadian communities are in need of reasonable, inexpensive housing.


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