Q2 marks "worst quarterly and annual deteriorations in 41 years"
Housing affordability across Canada continued to decline during the second quarter of the year, hitting the worst level of deterioration since the 1980s.
According to a recent report from the National Bank of Canada, mortgage payments now account for 63.9% of household incomes nationwide. This is a jump of 10.4 points from the previous quarter and 19.1 points from last year, marking the “worst quarterly and annual deteriorations in 41 years.”
Regionally, all 10 of the markets included in the report saw affordability worsen for the sixth consecutive quarter. This deterioration was most evident in Vancouver, Victoria, and Toronto where mortgage payment as percentage of income (MPPI) exceeded 90% for all dwellings. The MPPI in Quebec, Winnipeg, and Calgary, meanwhile, were among the lowest at around 30% for all dwellings.
Q2’s record-low in affordability was largely the result of rising mortgage interest rates, with the five-year benchmark mortgage rate increasing 123 basis points. Steep home prices also contributed to the deterioration. Seasonally adjusted home prices jumped 5.1% on a quarterly basis, landing on a median price of $810,986. By comparison, income rose by only 0.8%.
