![\"\"](\"https:\/\/www.livabl.com\/articles\/wp-content\/uploads\/2019\/09\/canadian-housing-market.jpg\")
<\/a>Photo: James Bombales<\/em><\/p>\nThe Canadian housing affordability picture became a little friendlier for homebuyers this year, with affordability improvements measured in 10 of the country\u2019s largest housing markets over the last three quarters.<\/p>\n
Even the stubborn markets of Toronto and Vancouver \u2014 long the downpayment saver\u2019s worst nightmare \u2014 registered improvements in housing affordability during this period.<\/p>\n\n
You may be assuming that Canadian home prices have logged a substantial enough drop this year to make the market more affordable for aspiring purchasers. However, the real explanation has a lot more to do with incomes and home financing and unfortunately, the improvements are not expected to last.<\/p>\n
According to National Bank, the publisher of a quarterly affordability report that measured the three consecutive improvements, housing market affordability was most helped by a significant decline in mortgage rates over the past year paired with what the bank calls a \u201cbooming labour market.\u201d<\/p>\n
\u201cIndeed, the free-fall in financing costs over the last nine months was the most substantial since 2012 (-87 bps). The booming labour market also played a significant role in this development as income grew at a whopping 5.1% annualized over that period while home prices did not materially change at the national level,\u201d write National Bank economists Matthieu Arseneau and Kyle Dahms.<\/p>\n
Essentially, Canadians have earned more money in the last year and can take out mortgages at cheaper rates than in past years. Of course, this is a good development for homebuyers, but the positive impact of lower mortgage rates and boosted incomes on affordability is not expected to last much longer.<\/p>\n
\u201cSurging population growth in Canada\u2019s largest metro areas, coupled with leveling mortgage rates should limit the scope for further improvement in home affordability,\u201d write Arseneau and Dahms.<\/p>\n
And, while the National Bank report notes that housing affordability at the national level has improved to the point that it\u2019s hovering around the historic average, it hasn\u2019t quite gotten there in the country\u2019s most expensive markets.<\/p>\n
Despite noteworthy affordability improvements in both the condo and non-condo (ie. all other property types) markets, Toronto homes are still coming in above their historical affordability averages. The same is true for the non-condo segment in Vancouver, though the city\u2019s condo segment is \u201cback to its historical average\u201d according to National Bank.<\/p>\n
Even the stubborn markets of Toronto and Vancouver \u2014 long the downpayment saver\u2019s worst nightmare \u2014 registered improvements in housing affordability in 2019. It’s not expected to last.<\/p>\n","protected":false},"author":5,"featured_media":197678,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"content-type":"","apple_news_api_created_at":"2019-11-21T15:02:28Z","apple_news_api_id":"00160cfa-98e1-4850-af4d-aec2238dc86c","apple_news_api_modified_at":"2019-11-21T15:02:28Z","apple_news_api_revision":"AAAAAAAAAAD\/\/\/\/\/\/\/\/\/\/w==","apple_news_api_share_url":"https:\/\/apple.news\/AABYM-pjhSFCvTa7CI43IbA","apple_news_coverimage":0,"apple_news_coverimage_caption":"","apple_news_is_hidden":false,"apple_news_is_paid":false,"apple_news_is_preview":false,"apple_news_is_sponsored":false,"apple_news_maturity_rating":"","apple_news_metadata":"\"\"","apple_news_pullquote":"","apple_news_pullquote_position":"middle","apple_news_slug":"","apple_news_sections":["https:\/\/u48r14.digitalhub.com\/sections\/09b86915-7d2b-3acd-915b-b215002d01b7"],"apple_news_suppress_video_url":false,"apple_news_use_image_component":false,"footnotes":""},"categories":[11269],"tags":[],"coauthors":[8652],"apple_news_notices":[],"yoast_head":"\n