New Price****** 304 15795 Croydon Drive – $699,900 – Grandview Corners
Posted by: Kimberly and Cindy Walker
Each Office Independently Owned & Operated
The federal budget promises $10 billion to make housing more affordable. Measures include tax credits for a variety of items, but the big ones, at least to me are:
I should stress these are not effective yet, simply announced. No doubt this will result in a few changes in the real estate market, more to come over the next few weeks.
Details of the budget are available online, but I found this article from the Globe and Mail to provide a good summary – Here’s how the 2022 federal budget affects home buyers and consumers – The Globe and Mail – https://www.theglobeandmail.com/canada/article-canada-federal-budget-2022-affordable-housing-taxes/
Quick Links… www.spagnuololaw.com and www.bcrealestatelawyers.com
*2 year fixed @ 2.48%
*3 year fixed @ 2.68%
*4 year fixed @ 2.78%
*5 year fixed @ 2.88%
*Variable Rate Mortgage 1.55% @ prime -1.15% prime rate is 2.70%
Residential Market Commentary – Affordability anxiety
Housing affordability in Canada is hitting all-time lows. A pair of the country’s big banks have published reports in the past month putting affordability at its worst level in more than 30 years.
The first report came out at the beginning of March. It shows that, as of the end of last year, a “representative” Canadian household would have to spend nearly 49% of its income to service a mortgage. That is up nearly 8% from a year earlier. The long term average since 2000 is 40.2%. The share of income needed to pay a mortgage is now at its highest level since the mid-1990s, just after Canada’s last real estate crash.
The report says home price increases are being driven by low interest rates. The authors expect rising rates will further erode affordability, but only for a short time. Then housing prices will stabilize and affordability will improve, as happened after the crash in the mid-90s.
The second report, which was released a few days ago, echoes much of what is in the first. It agrees that low rates are fueling price increases, but it also cites tight supply and “investors” as contributing factors.
The measurements used in the report’s “Affordability Index” deteriorated by more than 7 percentage points last year. That is a near-record worsening of the Index. (It was worse only once before, in 1990.) The Index now stands at nearly 50%. The report forecasts record setting affordability problems as home prices continue to rise and the Bank of Canada increases interest rates.
The authors of the report expect home buyers will adjust by: looking for lower cost homes, neighbourhoods or communities; opting for lower rate mortgages; using alternative ownership options; or renting out part of their home.